reporter2
03-06-22, 10:42
Muted response to PLH projects launched in May
Jun 02, 2022
PRIME Location Public Housing (PLH) projects at Bukit Merah Ridge and Ghim Moh Ascent launched in the latest Build-To-Order (BTO) round saw lower response rates, according to applications released on June 2, the last day of the exercise.
Overall application rate as of 5pm is slightly above 1 for 3-room flats, said Huttons Asia’s senior director for research, Lee Sze Teck. This is lower than rates for previous PLH projects, namely River Peaks I/II which was launched in November 2021 (3.1 times) and King George’s Heights launched in February this year (5.8 times).
Among 4-room flats, the Bukit Merah Ridge and Ghim Moh Ascent projects saw application rates of 4.9 times and 3.9 times respectively, while that of River Peaks and King George’s Heights were both above 10 times.
According to Lee, the lower subscription rate could be due to the area’s availability of resale flats which do not come with additional PLH restrictions. Lee added that buyers might be waiting for upcoming BTO launches located closer to the MRT station.
That said, Nicholas Mak, head of research and consultancy at ERA Realty, noted that the 4-room flats in Bukit Merah Ridge drew 5,940 applications - the highest number of applicants in this BTO exercise. Thus, the lower rates could be due to higher supply; a total of 1,897 4-room PLH flats were offered in May 2022, compared to last November’s 680 units and February’s 294 units.
According to Mak, this proves that “there is still strong demand” for bigger PLH flats.
“With the 5-year construction period and 10-year MOP (Minimum Occupation Period) for these PLH flats, homebuyers must wait about 15 years from 2022 before they could sell their flats in the resale market. If the applicants are young families or newly married couples, it is likely that the size of their families could expand in the future and they would require more space than what 3-room flats typically offer,” he said.
The gravitation towards larger flats were also seen among non-PLH flats in the latest BTO exercise; 5-room flats in Jurong West and Yishun recorded the highest overall application rate of 14.1 and 13.8 times respectively.
The popularity of Lakeside View at Jurong West could be due to its price point, its shorter completion period, the transformation of Jurong Lake Gardens and pent up demand. Its 5-room apartments start from S$412,000 excluding housing grants, compared to the S$485,000 starting price at Yishun.
“The 5-room flats at Jurong West are also priced lower than 4-room flats in mature towns and those of the PLH projects,” Mak noted.
That said, Yishun was the most popular estate in this BTO exercise, with the overall application rates for both 4-room and 5-room flats above 10 times. This could be due to a shorter waiting time of only 39 months, which is comparable to that of pre-Covid-19 times, he added.
Mak said: “Given the strong buyers’ preference for bigger flats in PLH projects, HDB should switch more of the buildable space in such projects from 3-room flats to the larger flats. In addition, the government should also offer more big flats such as 4-room and 5-room flats in future PLH projects.”
“The demand for 5-room flats is significantly higher than 4-room flats in a clear indication of buyers’ preference for more space. Perhaps instead of using PLH as a blunt policy tool to control prices, a better fix will be to increase the supply of 5-room and even 3-generation flats in mature estates,” Lee added.
https://i.imgur.com/oe26Hpb.png
https://www.businesstimes.com.sg/real-estate/muted-response-to-plh-projects-launched-in-may
Jun 02, 2022
PRIME Location Public Housing (PLH) projects at Bukit Merah Ridge and Ghim Moh Ascent launched in the latest Build-To-Order (BTO) round saw lower response rates, according to applications released on June 2, the last day of the exercise.
Overall application rate as of 5pm is slightly above 1 for 3-room flats, said Huttons Asia’s senior director for research, Lee Sze Teck. This is lower than rates for previous PLH projects, namely River Peaks I/II which was launched in November 2021 (3.1 times) and King George’s Heights launched in February this year (5.8 times).
Among 4-room flats, the Bukit Merah Ridge and Ghim Moh Ascent projects saw application rates of 4.9 times and 3.9 times respectively, while that of River Peaks and King George’s Heights were both above 10 times.
According to Lee, the lower subscription rate could be due to the area’s availability of resale flats which do not come with additional PLH restrictions. Lee added that buyers might be waiting for upcoming BTO launches located closer to the MRT station.
That said, Nicholas Mak, head of research and consultancy at ERA Realty, noted that the 4-room flats in Bukit Merah Ridge drew 5,940 applications - the highest number of applicants in this BTO exercise. Thus, the lower rates could be due to higher supply; a total of 1,897 4-room PLH flats were offered in May 2022, compared to last November’s 680 units and February’s 294 units.
According to Mak, this proves that “there is still strong demand” for bigger PLH flats.
“With the 5-year construction period and 10-year MOP (Minimum Occupation Period) for these PLH flats, homebuyers must wait about 15 years from 2022 before they could sell their flats in the resale market. If the applicants are young families or newly married couples, it is likely that the size of their families could expand in the future and they would require more space than what 3-room flats typically offer,” he said.
The gravitation towards larger flats were also seen among non-PLH flats in the latest BTO exercise; 5-room flats in Jurong West and Yishun recorded the highest overall application rate of 14.1 and 13.8 times respectively.
The popularity of Lakeside View at Jurong West could be due to its price point, its shorter completion period, the transformation of Jurong Lake Gardens and pent up demand. Its 5-room apartments start from S$412,000 excluding housing grants, compared to the S$485,000 starting price at Yishun.
“The 5-room flats at Jurong West are also priced lower than 4-room flats in mature towns and those of the PLH projects,” Mak noted.
That said, Yishun was the most popular estate in this BTO exercise, with the overall application rates for both 4-room and 5-room flats above 10 times. This could be due to a shorter waiting time of only 39 months, which is comparable to that of pre-Covid-19 times, he added.
Mak said: “Given the strong buyers’ preference for bigger flats in PLH projects, HDB should switch more of the buildable space in such projects from 3-room flats to the larger flats. In addition, the government should also offer more big flats such as 4-room and 5-room flats in future PLH projects.”
“The demand for 5-room flats is significantly higher than 4-room flats in a clear indication of buyers’ preference for more space. Perhaps instead of using PLH as a blunt policy tool to control prices, a better fix will be to increase the supply of 5-room and even 3-generation flats in mature estates,” Lee added.
https://i.imgur.com/oe26Hpb.png
https://www.businesstimes.com.sg/real-estate/muted-response-to-plh-projects-launched-in-may