Wednesday, November 28, 2012

BTO supply boost easing application rates

Demand for new Build-to-Order (BTO) flats may be stabilising as overall application rates for such units (excluding studio apartments) eased marginally to 2.6 for the November launch, according to data from the Housing and Development Board (HDB).

PropNex Realty noted that first-time buyers would likely get more chances to select a flat as their application rate was 1.6 against 11.7 for second-timers.  

Mohamed Ismail, CEO of PropNex, said: “It is evident that HDB’s larger BTO launches every two months has been effective in bringing down overall application rates especially for first-timers - which recorded the lowest rate in recent years.”

November’s BTO launch comprised 6,463 units across seven projects. This has increased the year’s total to 27,084 units – the largest BTO supply since 2002.

First-timers were given priority in the latest launch and were able to take up various grants and schemes.

“The combination of a larger launch exercise, priority flat allocation and housing grants have been effective in alleviating the current red hot demand for new homes,” Ismail said.

Given that application rates for first-timers have stabilised, “it is perhaps timely to address the needs of second-timers as rates continue to be high”, said Ismail, adding that the housing board could increase second-timer allocation from the current 5/15 percent to 30/10 percent in mature and non-mature estates respectively.

“We believe that this increase in flat allocation for second-timers will help many who are in need to upgrade to a larger flat.” Ismail also feels that the 30 percent allocation for second-timers is not unusual, with executive condominiums (ECs) having the same allocation.

View the original article here

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