Tuesday, August 7, 2012

Second-time home buyers on the prowl


SINGAPORE: Even as the Government shifts its focus on meeting the housing needs of second-timers, the number of such applicants has crept up - after a sharp downward trend in recent months - based on figures from the latest Build-to-Order (BTO) exercise.

Application for the 4,200 units on offer closed yesterday. As at 5pm on Monday, the application rate of second-timers - who are mostly upgraders, according to property analysts - was 11.4 while that of first-timers stood at 1.7.

The proportion of flats in BTO projects allocated to second-timer applicants are 15 per cent in non-mature estates, and five per cent in mature estates. Second-timer application rate refers to the number of second-timer applications divided by the allocated flat supply for these prospective buyers.

The second-timer application rates were, for instance, 44.1 for four-room flats at the Clementi Gateway project, and 24 for five-room flats at the Waterway Cascadia project in Punggol.

While property analysts said the higher second-timer application rates were not a cause for concern - given the attractive locations of some of the BTO projects - some believe tweaks are imminent to allocate more BTO flats to second-timers.

ERA Key Executive Officer Eugene Lim said he expects the allocation for second-timers in non-mature estates to be increased to between 20 and 25 per cent, while PropNex CEO Mohamed Ismail suggested increasing the proportion further, to 30 per cent.

For mature estates, Mr Lim felt the increase, if any, would be marginal whereas Mr Mohamed Ismail felt the allocation should be increased to 15 per cent.

Prior to the latest figures, the application rate for second-timers has been decreasing, leading National Development Minister Khaw Boon Wan to remark in June that the chances for such buyers have increased significantly.

Mr Khaw's comments were based on the application rate falling from 25.9 in November last year, to 10.9 in March and more recently 8.8 in June.

On August 5, Mr Khaw reiterated that, in the year ahead, he will focus on improving the chances for second timers - after addressing the demand from first-time buyers in the past year.

On the latest application rate for second-timers, analysts noted the attractiveness of the locations of the BTO projects, particularly those in the mature estates. In particular, the projects at Bukit Merah and Clementi would be popular with upgraders despite being relatively pricier.

Noting that there have been few new BTO projects in these two estates, DWG Research and Consultancy Senior Manager Lee Sze Teck said: "Unlike first-timers whose main concern would be the affordability... second-timers are looking for what they need and usually it is bigger units for their bigger families."

SLP International Head of Research and Consultancy Nicholas Mak noted that ultimately, a balance has to be struck between meeting the needs of young couples and families looking to upgrade.

He said: "I do not think there is any way to ease the demand by second-timers... the Government will have to decide how to distribute scarce resources."

-       TODAY

  
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