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by OrangeTee & Tie Pte Ltd.

OrangeTee | Comments on October 2023 BTO sales exercise

BTO Launches

4 October 2023 – The Housing and Development Board (HDB) has launched the October 2023 Build-to-Order (BTO) sales exercise. 6,800 flats from six sites across four towns (Choa Chu Kang, Kallang/Whampoa, Queenstown, and Tengah) are available for application.

               One site at Kallang/Whampoa and another at Queenstown fall under the Prime Location Public Housing model. For this BTO exercise, rules will be tightened for the non-selection of flats while more flats will be set aside for first-timer families.  

               More first-time families

               We expect fewer applicants to apply after the non-selection penalty rule kicks in. As a result, serious buyers and first-time families (Parents and Married Couples) may have a higher chance of getting a flat. Moreover, first-time families with children are given an extra ballot, and more flats will be set aside. However, this group of buyers may be small. 

               Impact of estate reclassification
               
               Although some couples may hold back their applications owing to the stricter non-selection rules, other buyers rushing in to buy flats at places they deem to be in future Plus locations may mitigate the drop-out effect. During the National Day Rally 2023, it was announced that new flats launched in the second half of next year will be reclassified as Prime, Plus and Standard flats. Prime and Plus flats will be subjected to a longer MOP, subsidy claw backs and more stringent resale criteria.Some buyers who wish to avoid being subjected to the longer MOP and other new rulings may try to obtain a flat ahead of the estate reclassification that will take place in 2H 2024. Apart from PLH model flats, the new flats still have a 5-year MOP.Therefore, application rates for flats near MRT stations or city fringe areas may potentially see more applicants. Such sites include the Rail Green BTO project at Choa Chu Kang, which is within walking distance of Bukit Panjang MRT station; the Verandah @ Kallang site along Geylang Road, which is at the city fringe and near National Stadium; and Plantation Edge at Tengah site, which is near the Jurong Region Line.



               Impact of non-selection rule

               First-timers who reject HDB’s offer to pick a BTO flat will lose their priority for a year. Due to the tightened rules for the non-selection of BTO flats, we expect a drop in applicants since those not ready to commit to a purchase or are uncertain about their buying decision will unlikely apply for a flat now. These may include young couples unprepared for marriage or considering other housing options.

               Moreover, applicants will need to put more thought into their decisions. They must consider carefully if they will still proceed with the purchase if they obtain an undesirable queue number. Young couples who do not want to jeopardize their future chances of getting a well-located flat will likely not apply flippantly now.

               Robust demand for 2-room flexi flats

               We expect interest in 2-room Flexi flats in Kallang/ Whampoa, Choa Chu Kang and Tengah to continue to be robust, even as the government has announced that they will ramp up the supply of 2-room flats and allow singles to buy flats across the island.               
               
               Demand for 2-room Flexi flats has been strong, with an average of three applicants applying for one flat since 2021. It is good that more 2-room flats will be built. Although the number of such units has increased, the number of applicants has also risen. For instance, the number of 2-room flats launched for sale rose 5.1 per cent from 4,194 units in 2018 to 4,408 units in 2022. However, the number of applications increased by 108 per cent, from 7,145 units to 14,865 units over the same period. 




               Project analysis

               Choa Chu Kang – Rail Green I & II @ CCK

               We expect demand to be strong for the flats in Choa Chu Kang. A short walk away from various amenities, an MRT station and other transport nodes, future BTO flats may be classified under Plus flats. Therefore, those who do not want to be committed to a 10-year MOP may apply for a new flat now since the MOP is still five years. Moreover, this sales launch offers large flats like 5-room and 3Gen flats, which will appeal to big families. Singles who wish to apply in the same location as their extended families may also apply.

               Kallang/Whampoa – Verandah @ Kallang, Rajah Residences, Tenteram Vantage

               Verandah @ Kallang, which falls under the PLH model, may be considered the most attractive of the three sites given its proximity to Kallang MRT station, the Singapore Sports Hub and Kallang Wave Mall. The Tenteram Vantage flats may be the least attractive as it is at the intersection of the Pan-Island Expressway and the Central Expressway, and residents may have to endure noise and dust. With almost 3,000 flats offered across three plots, overall application rates may be lower since the total number of flats is high. We anticipate more people applying for the plot at Kallang/ Whampoa to try to get a unit at Verandah @ Kallang.

               Queenstown – Tanglin Halt Cascadia

               We anticipate keen demand for these flats, which fall under the PLH model, as Queenstown has always been popular among buyers. As a mature estate, many amenities exist, such as a short walk from Commonwealth MRT station, near a food court and supermarket. It is located next to the Rail Corridor, an attractive place to visit over the weekends for families and within the Health District @ Queenstown. The site may also be popular with residents working in the one-north area, just a short distance away.

               Moreover, private homes in the vicinity are sold at a much higher price tag. For instance, nearby condos ranging from 800 to less than 1,200 sqft were transacted at a median price of S$1.42 million at The Rochester Residences, S$1.33 million at One-North Residences, and S$2.04 million at Stirling Residences in the first half of this year.

               Tengah – Plantation Edge I & II

               We expect demand to be healthy as these flats are directly next to the future Tengah Park Station on the Jurong Region Line (JRL), which may fall under the Plus flat classification for future BTO flats. Although these flats are not within a 1-km radius of the future ACS Primary in Tengah, it is still near other popular primary schools like Princess Elizabeth Primary School. 





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