Channelnewsasia.com | Posted: 27 March 2013 2123 hrs
SINGAPORE: Four- and five-room flats in Punggol look to be the most heavily subscribed among first-time home buyers in this month's Build-To-Order exercise which closes at midnight.
A total of 3,898 flats were launched in this month's Build-To-Order exercise. They are all in non-mature estates of Sengkang, Punggol and Bukit Batok.
Analysts say this may be one reason why there has been a small dip in the overall application rates.
This compared to the previous exercise in January when projects in mature estates were also on offer. The overall application rate as of 5pm was 2.9, compared to 3.8 in the January exercise. The application rate in the November 2012 launch was 2.9.
Mr Mohamed Ismail, Chief Executive Officer of PropNex, said: "Some people would prefer locations that is (are) beyond this and that could also be a reason where they say after all, there's many more in the pipeline and some people choose to take a wait and see attitude. Now that the success rates are much higher, people are not as anxious as they were couple of quarters ago, when they know if they're not successful, it might take a long period of time."
But there could be other reasons as well.
Mr Lee Sze Teck, Senior Manager of Research and Consultancy at Dennis Wee Group, said: "The government has announced it is trying to bring home prices down, maybe four years' annual income, and some of these plans are in the works, so some of them could be observing to see how the government plans to do that. And lastly of course, the construction period for BTO flats, these are as long as 40 plus months and people who do not want to wait, of course they will hold back."
The development in Punggol was the most popular among first-time home buyers.
As of 5pm, there were 2.6 first-time applicants for each four-room flat and 2.4 first-time applicants for each five-room flat.
It is the first time the Housing and Development Board is launching a development in Punggol Town since July last year.
It has been touted to be a town to watch - with seven different waterfront housing districts.
Mr Mohamed Ismail added: "People have more choices and they're more choosy in deciding whether to apply for any of the BTOs. It is again reflective of the three (locations) why Punggol stands out. People like lifestyle and the younger generation values such lifestyle as a priority in the home that they want to stay."
More than 4,800 new flats will be on offer in the next Build-To-Order exercise in May. But it's the additional 3,000 flats in the concurrent Sale of Balance Flats exercise that some analysts say will draw strong demand.
Mr Lee Sze Teck added: "All the while, Sale of Balance flats are very attractive to people because of the shorter waiting time. This time round also because of the construction period, we would actually see more people going for the Sale of Balance flats because they just want to get the keys to their flats faster."
Some analysts say some could be waiting for new housing policy changes to come into effect in the next BTO launch in May, including a higher quota of flats allocated to second-timers.
National Development Minister Khaw Boon Wan announced the government would double the second-timer quota for two-room and three-room flats in non-mature estates from 15 to 30 per cent.
Five per cent of the 30 per cent quota will be set aside for divorcees or widowed who have children below 16.
And letting parents who are expecting a child to also enjoy priority for new flats under the Parenthood Priority Scheme.
The overall application rate for first timers also dipped to 1.9, compared to 2.4 in the last BTO exercise in January.
Second-timer rates also fell from 14.9 in January to 9.2 this time round.
Mr Mohamed Ismail said it could also be a reflection that the ramped up supply of BTO flats are taking effect.
The HDB launched 25,000 flats in 2011 and 27,000 new flats in 2012.
The government has also announced it will launch about 25,000 flats this year.
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