More second-time buyers opt for BTO

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http://www.straitstimes.com/premium/singapore/story/more-second-time-buyers-opt-bto-20121128

More second-time buyers opt for BTO

Bigger flats in Toa Payoh and Bedok are the most popular

Published on Nov 28, 2012

By Charissa Yong


THE last Build-to-Order (BTO) exercise of the year closed yesterday, with 2.7 applications for each HDB flat on offer.

This is slightly higher than the 2.4 overall rate of the previous exercise in September, as more second-timers made a pitch for the homes in five estates.

There were 12.7 applications from these second-timers for each flat, a rise from 11.5 in the previous round.

In contrast, applications from first-timers for the 6,463 flats stayed low, dipping marginally to 1.7 from 1.8 in September.

Analysts told The Straits Times that the higher prices of HDB resale flats may be driving second-timers - a group that includes those upgrading to larger flats - into the BTO market.

Senior manager Lee Sze Teck, of property firm Dennis Wee Group, said there was little room to negotiate the prices of some resale flats, forcing some upgraders to turn to BTO flats.

Resale prices have been persistently high because they are supported by demand from private property owners who are downgrading, permanent residents and singles who are not eligible for new HDB flats, said ERA Realty key executive officer Eugene Lim.

Mr Lim, like Mr Lee, said that more second-timers prefer flats in mature housing estates over those in new areas.

But it is difficult for them to snag a new BTO flat in these mature estates, so resale flats are the next-best option, said Mr Lim.

Second-timers are allocated 5 per cent of BTO flats in mature estates and 15 per cent in non-mature estates.

Said Mr Lim: "Perhaps this is an opportune time for HDB to tweak the ratio of flats allocated for second-timers, as this may help divert some demand away from the red-hot resale market."

The most sought-after flats are the larger units in the mature estates of Bedok and Toa Payoh.

Six applications were received for each five-room flat available in Fengshan GreenVille in Bedok, and almost five for each four-room Toa Payoh unit.

At the same time, the BTO flats on offer in the new estate of Sengkang proved popular as well.

Nearly six applications were received for each of the 104 three-room Compassvale Mast units.

This was expected since the flats will be next to the Sengkang MRT station, said Mr Lim.

The Housing Board plans to offer at least 20,000 more BTO flats next year.

The large supply of new homes in the pipeline could slow down the demand for resale flats, he added.

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http://www.businesstimes.com.sg/premium/singapore/application-rate-bto-flats-rises-marginally-20121128

Published November 28, 2012

Application rate for BTO flats rises marginally

By Mindy Tan


OVERALL application rates (excluding studio apartments) for built-to-order (BTO) flats rolled out in November rose marginally to 2.8, even as a record supply of BTO units were launched this year.

Figures provided by the Housing Development Board showed that as at 5pm yesterday, the first-timers' application rate for the November BTO launch dipped to 1.7 from 1.9 in September's launch. The rate for second-timers was 12.7, versus 12.5 previously. The overall application rate for the September launch was 2.7.

"It is evident that HDB's larger BTO launches every two months has been effective in bringing down application rates especially for first-timers, which recorded the lowest rate in recent years," said Mohamed Ismail, chief executive of PropNex Realty.

In November, HDB rolled out 6,463 new units. Including the 7,153 balance flats offered earlier in the Sale of Balance Flats (SBF) Exercises, the total number of new flats launched in 2012 was 34,237.

Of the units launched, the most popular flat type was the five-room unit in Bedok (Fengshan GreenVille), which had an overall application rate of 6.0. It was also a favourite among second-timers, with an application rate of 51.6.

"The results are expected, given the increasing trend of resale prices this year," said ERA Realty Network key executive officer Eugene Lim, who noted that resale prices for the third quarter increased 2 per cent, breaking a record.

With the gradual stabilisation of application rates for first-timers, it is perhaps timely to address the needs of second-timers as rates continue to be high, said Mr Ismail. "HDB can consider altering the allocation of flats from the current 5 per cent/15 per cent of the total BTO supply in mature and non-mature towns, to 30 per cent/10 per cent for second-timers respectively," he suggested.

"The 30 per cent allocation towards second-timers is also not unusual, as currently executive condominiums (ECs) also have the same rate set aside for this group of buyers," he added.

In August, National Development Minister Khaw Boon Wan noted on his blog that the momentum created to help more Singaporeans own their flats had made steady progress.

"Second-timer application rates, which used to exceed 25, have come down significantly," he noted. In January, the application rate for second-timers was 25.6.

Application for the November BTO launch closes at midnight on Nov 27. A final update of the total number of applications received will be given on Nov 28, at 2pm.

Meanwhile, the Inland Revenue Authority of Singapore said that the property tax bill for 2013 will increase by between $40 and $50 for most HDB flat types, after taking into account a one-time rebate of $40 for owner-occupied HDB flats. All one-room and two-room owner-occupiers of HDB homes do not need to pay property tax in 2013, similar to last year.

The increase in property tax comes after a revision of annual values of HDB flats with effect from Jan 1, 2013, reflecting the rise in market rentals. Since Jan 1 this year, market rentals of HDB flats have risen 8-13 per cent.