Lower application rates for February 2023 BTO exercise

The February 2023 Build-To-Order (BTO) exercise, which saw 4,428 flats launched for sale on Feb 28, has recently closed. HDB data updated as of 5pm on Mar 6 show that the number of applicants is 15,234 – the lowest number of applicants since September 2019, when it was 7,179, according to Lee Sze Teck, Huttons Asia’s senior director of research.

This puts the application rate at about 3.44 times. This is higher than the 2.5 application rate registered in the November 2022 BTO exercise, but lower than the other BTO launches last year, which had rates ranging from 5.8 and 7.8 times. Ismail Gafoor, CEO of PropNex Realty, believes this more measured response could be due to some buyers waiting for other projects that suit them better, or because of the higher CPF housing grants given to first-time homebuyers, which could have channelled some of the demand into the resale HDB flat market. Senja Close EC

Recently, the government also announced tighter rules for buyers who do not book a BTO flat when invited. Taking effect from the August BTO, those who fall under the First-Timer (Parents & Married Couples) or FT(PMC) category have an increased chance of getting flats in locations of their choice. Nicholas Mak, head of research and consultancy at ERA Singapore, opines that the announcement has had an effect, prompting buyers to be more careful about which BTOs they apply for.

The two projects located in Kallang and Whampoa – both mature estates – got the strongest demand, receiving an overall application rate of about 4.16 times for the 1,784 flats available. The other PLH project in Queenstown, a mature estate, saw an application rate of 3.31 times for the 723 flats available, while the two projects in non-mature estates Jurong West and Tengah respectively had an application rate of 2.73 and 2.84.

For first-timers, the median application rate across all projects was 0.3 times and 1.8 times for two-room flexi and bigger flats respectively. However, second-timers had much higher application rates, especially for larger flats in the mature estates, with some going above 30 times.

With the upcoming launches in May in Bedok and Serangoon marking the first BTO launches in those estates since seven and nine years respectively, pent up demand is expected. Coupled with the tightened rules, buyers are advised to be careful when selecting BTO flats.