Two BTO projects to start despite slower flat sales

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October 7, 2009 Wednesday

Two BTO projects to start despite slower flat sales

HDB confident of sustained demand for public housing

By Jessica Cheam


MODERATE sales at two Housing Board projects launched last year suggest that first-time home buyers still have plenty of choice despite the high demand for flats in some areas.

The take-up rate at Punggol Breeze was 69 per cent while only 55 per cent of applicants selected flats at Fernvale Residence in Sengkang, according to new HDB data released to The Straits Times this week.

Some home seekers turned down a chance to buy as the waiting time for the build-to-order (BTO) projects - three to four years - was just too long.

'Some eventually decided to opt for other housing that can be ready sooner than BTO flats,' said the HDB. Other reasons buyers gave were that preferred flats had already been sold, or that they had decided to consider other housing options.

Waiting time is likely a key factor, given the overwhelming response to last week's launch of 2,132 completed or nearly completed HDB flats.

Applications for homes in 24 estates across the island are pouring in, including those for units in the locations of the two BTO projects.

There have been seven bids for every four-room flat in Punggol, and 25 for every four-roomer in Sengkang as of 5pm yesterday.

Those who bought at the two BTO projects have been assured by the HDB that work on their homes will soon be under way.

Under the BTO scheme, flats are built when a certain demand, typically 70 per cent, is reached, but this serves only as a guide, said the HDB, which told The Straits Times that it will start building the Punggol and Sengkang projects.

In the case of Fernvale, it will be the first BTO project to be started with a take-up rate below 60 per cent - a move that signals HDB's confidence in sustained demand for public housing.

It will 'help build up critical mass of residential units required for the area's further development', said the HDB.

Below-par take-up rates have not deterred construction in the past. A Punggol project was started in 2003, and Fernvale Court in Sengkang two years later, despite both having a take-up rate of 67 per cent. Both projects are 97 to 99 per cent sold today.

The HDB data also showed an overall take-up rate of 89 per cent for the 7,793 new flats offered in 12 BTO projects last year.

These numbers were available only recently as the selection process can take months after the project is launched.

PropNex chief executive Mohamed Ismail said the numbers were strong, considering that the flats were in non-mature estates.

The data also showed higher sales of projects in towns where there had been no recent launches, and those in more central locations. Projects offering two-roomers were less popular.

Ngee Ann Polytechnic real estate lecturer Nicholas Mak said it was not surprising that some projects did not fare as well due to their distance from MRT stations.

Both analysts said the HDB's move to go ahead with projects even with low take-up rates was a step 'in the right direction', as it would replenish its stock of flats, which has dwindled in recent years due to high demand.

ERA associate director Eugene Lim said that as plans to make Punggol the first waterfront public housing estate materialise, sales could improve.

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12,700 bids for 2,132 flats so far

APPLICATIONS are pouring in for the HDB's sales exercise for 2,132 flats in 24 estates across the island.

The homes, launched under its new Sales of Balance Flats scheme last Thursday, have attracted 12,728 bids as of the latest update at 5pm yesterday - about six times oversubscribed.

Analysts say applications could hit 20,000 when the process closes next Wednesday, making 10 bids for every available flat.

The main reason for their popularity is that the flats are completed or nearly completed, so buyers will not have to wait three years before moving in.

Flats on offer are accumulated from earlier build-to-order exercises, the Selective En-bloc Redevelopment Scheme and repurchased flats.

The HDB's new process has replaced the previous balloting, quarterly sales and half-yearly sales exercises.