June 2024 Bto Exercise Sees Application Rate 31 Highest May 2023
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The June 2024 Build-to-Order (BTO) exercise came to a close on June 26 at 11.59pm, after the launch of 6,938 flats for sale on June 19. According to HDB data updated as of 2pm on June 26, the number of applications stood at 24,179. This is the highest number of applicants since November 2022, when the application rate was 2.6, according to Christine Sun, chief researcher and strategist at Orange Tee & Tie.
The current application rate of 3.1 times is the highest since the BTO exercise in May 2023, which had an application rate of 3.8. Compared to the February BTO exercise, which had over 11,000 applications for 4,126 BTO flats, the number of applicants has increased by over 100%. This works out to an application rate of about 2.5.
According to Mohan Sandrasegeran, head of research and data analytics at SRI, the sharp increase in applications can be attributed to the impending change in housing classification of Standard, Plus, and Prime flats in the October BTO exercise. This change has created a sense of urgency among home buyers.
Lee Sze Teck, senior director of data analytics at Huttons Asia, agrees that the change in housing classification is a major factor for the high demand. He adds, “This is the last BTO exercise where buyers will face fewer restrictions on the subsequent sale of their flat. Additionally, it is unclear how HDB will categorise flats under the new classification.”
Another reason for the high demand is the launch of highly attractive BTO projects, such as Tampines GreenTopaz. This project has received the highest number of applications, with 214 four-room and 174 five-room units attracting over 2,100 applicants each. According to Sandrasegeran, this is likely the last BTO project in a mature estate near an MRT station. It also comes with a five-year minimum occupation period (MOP) and is not subject to the new resale restrictions. In addition, the project is part of a future mixed-use residential development with a shorter waiting time of 37 months. An upcoming Government Land Sales (GLS) plot adjacent to the site will include a sizeable commercial space, offering more amenities for residents.
The five-room flats at Tampines GreenTopaz were the most popular, with an application rate of about 12.1 per flat. The overall application rate for the four-room units was about 10.1.
The two Prime Location Public Housing (PLH) projects, Holland Vista in Queenstown and Tanjong Rhu Riverfront I and II in Kallang and Whampoa, were also popular among applicants, according to Lee from Huttons Asia. Despite having a subsidy clawback rate of 9%, the highest since such flats were introduced, applicants were still drawn to these projects due to their attractive locations.
Moreover, the capital appreciation for such flats is expected to be higher than 9% in the future, which may have pushed buyers to proceed with the purchase, says Sun from Orange Tee & Tie. Holland Vista saw the second-highest application rate at about 9.0, with its 228 four-room flats attracting over 2,063 applicants. Its attractive location near Holland Village MRT Station and the One Holland Village shopping mall is a major draw for home buyers. It is also likely the last plot of land for public housing in Holland Village.
Meanwhile, Tanjong Rhu Riverfront I and II offer riverfront living in the highly coveted Tanjong Rhu precinct. However, Lee notes that their application rates were lower, with first-timer families applying at rates of 0.8 for three-room flats and 1.9 for four-room flats.
The Yishun project at Chencharu Hills has emerged as a “dark horse” with better-than-expected sales performance, despite having more outstanding sites released in the same sales launch, says Sun from Orange Tee & Tie. The pilot BTO project at the new Chencharu estate in Yishun saw its two-room flexi flats yielding the highest application rate at 6.6 for first-timer singles, totalling 1,489 applicants. It also received over 1,200 applications competing for 420 four-room flats and more than 1,400 applications for the 390 five-room flats.
Sun says this is collectively higher than the number of applicants for other non-mature estates in Jurong and Woodlands. “The good sales performance suggests that many young couples are receptive to residing in Chencharu, despite it being a new residential area in a non-mature estate.”
SRI’s Sandrasegeran adds that the estate’s appeal may stem from its anticipated amenities, proximity to Khatib MRT Station, and the promise of a vibrant new community. “These encouraging figures suggest an underlying demand for housing in the Chencharu estate, and it is likely to bode well for future BTO projects slated to be launched in the area.”
Out of all the projects, Marsiling Peak I and II drew the fewest applicants, with a first-timer rate of under 1.0 for all flat types, says Eugene Lim, key executive officer at ERA. He notes that this project is the furthest away from an MRT station, with Woodlands and Woodlands North MRT Stations being 2km away. “Buyers who want to live in the north have the better option of Chencharu Hills, which is not only more accessible but is also priced lower.”