SINGAPORE — New public housing units in areas such as Geylang and Tampines continue to attract buyers, going by the latest Build-To-Order (BTO) sales exercise conducted by the Housing and Development Board (HDB). In particular, four-room flats in Geylang drew the most interest.

As of 5pm on Monday (Nov 20), when the sales closed, there were more than three applicants vying for each of these flats in Eunos Court at Geylang — or 1848 applications for the 538 flats available.

Demand for three-room flats in Tampines GreenCourt also exceeded supply, with 193 applications for the 186 flats available.

For the newer estates, four-room flats in Northshore Edge at Punggol were popular, drawing 466 applications for the 192 flats available.

Nearly 5,000 units in five new BTO projects were put up for sale on Nov 14, in areas such as Punggol, Sengkang, Geylang and Tampines.

Across the board, the number of second-time applicants far exceeded first-time applicants for this sales launch.

At Eunos Court, for example, there was an application rate of 14.2 for second-timers, compared to 2.9 for first-timers. At Tampines GreenCourt, the rate was 13.0 for second-timers, as opposed to 0.4 for first-timers.

Mr Chris Koh, director of property firm Chris International, said that this might be so because flats in these mature estates are pricier than those in non-mature towns. “If I want to buy a flat in Geylang and Tampines, I must have some capital. This is why we see less demand from first-timers, which are probably younger families,” he explained.

A four-room flat at Eunos Court is priced at S$522,000, excluding housing grants.

PropNex’s chief executive officer Mohd Ismail said that the strong demand in Geylang is because the location is “much closer to town”.

“Also, people understand that a flat with good location... when it matures after the five-year minimum occupation period... tend to have a huge capital appreciation,” he added.

Despite the strong interest in mature estates this round, the overall subscription rate for BTO flats continued to fall.

The overall subscription rate for three-room and bigger flats was 1.5, down from 1.7 in August. The rate was 2.9 in May, and 3.3 in February.

SIGNS OF DIPPING DEMAND

Analysts noted that these could be signs that demand for BTO homes from young families may be tapering off. 
Mr Ku Swee Yong, co-founder of online property information portal HugProperty, said: “It seems we have generally satisfied demand, especially for first-time buyers.”

Four-room flats in Fernvale Glades, located in Sengkang, received 360 applications, which is fewer than the 390 units available. Similarly, applications for five-room flats in the same estate had 267 applications for the 273 units available.

Mr Nicholas Mak, executive director at ZACD Group, a real estate investment firm, said: “Overall application rate is fairly low, less than two times. This implies that homebuyers’ demand is been met.”

He added: “If HDB were to increase supply of BTO flats next year, it could possibly lead to a glut in the near future.”

While 95 per cent of the BTO flats in mature estates have to be set aside for first-time buyers, analysts suggested that the HDB could consider adjusting this application ratio.

Mr Mak said that in doing this, it could allocate more flats to second-time applicants, seeing as demand from them is still much higher than that from first-timers.

Another reason for the overall lower subscription rate could be the volume of flats offered in this exercise.

Mr Ismail from PropNex said: “Homebuyers have a wide (variety of) choices, and there is relatively ample supply (of flats) this round... As long as HDB continues to provide adequate numbers, then subscription rate will tend to be relatively lower.”

The takeaway from this latest exercise is that homebuyers are still “location-sensitive”. Mr Mak said. “Better locations such as Eunos Court, with walking distance to MRT stations, saw higher demand.”

The next BTO launch in February next year will see around 3,600 new units in Choa Chu Kang, Woodlands, Geylang and Tampines being offered.