Lower application rates for February 2023 BTO exercise

The February 2023 Build-To-Order (BTO) exercise closed yesterday at 11.59pm, after the launch of 4,428 flats for sale on Feb 28. According to HDB data updated as of 5pm on Mar 6, the number of applicants stood at 15,234 – the lowest since September 2019 when there were 7,179 applicants. Lee Sze Teck, Huttons Asia’s senior director of research, notes that this application rate of 3.44 times was higher than that in the November 2022 BTO exercise (2.5 application rate), however it was lower than in the other BTO launches last year in February, May, and August (rates ranging from 5.8 to 7.8 times).

Ismail Gafoor, CEO of PropNex Realty, believes that the more measured response to the latest launch may have been due to some buyers waiting for other more suitable projects. He states that the upcoming BTO launches in May in Bedok and Serangoon (the first in seven and nine years respectively) could see pent-up demand for the five-room units there.

Gafoor also opines that the Budget measures targeted at helping first-time homebuyers, along with the tighter rules and greater priority for First-Timer (Parents & Married Couples) or FT(PMC) applicants, announced by the government, may have caused buyers to be more selective in which BTO projects they apply for.

The two BTO projects located in mature Kallang and Whampoa estates (including a Prime Location Public Housing (PLH) project) garnered the strongest demand, with an overall application rate of 4.16 times for the 1,784 flats available. The PLH project located in the mature Queenstown estate had an application rate of 3.31 times for the 723 flats available. Jurong West and Tengah, both non-mature estates, had application rates of 2.73 and 2.84 respectively.

Gafoor notes that the application rates for first-timer families have been relatively low, with HDB data showing a median application rate of 0.3 Tengah Plantation EC times for two-room flexi flats across all projects, and 1.8 times for three-room and bigger flats. Second-timer families however, had much higher application rates – especially for larger flats in the mature estates, with the rate crossing 30 times.

While this February BTO exercise saw a moderate application rate, future launches in Bedok and Serangoon present a possible opportunity for those looking for their next home. It is expected that improvements to the eligibility criteria may result in more successful applications for those under the FT(PM&C) category.