November 2022 BTO exercise sees lower application rates
Christine Sun, top vice president of research and even analytics at OrangeTee & Tie, notes that the number of applications in November dropped by 37.2% compared to the August exercise. “This is the most affordable general BTO application rate since September 2019 with an application rate of 2.1,” she highlights.
The November 2022 Build-To-Order (BTO) sales exercise closed on Dec 2 with 24,562 applications acquired, according to data published by HDB. HDB is offering 9,655 apartments up for sale under the exercise, making it the biggest offering to day for a solo kick off.
The highest possible application rates in the November BTO exercise were documented for the three- including four-room flats under the Prime Location Public Housing (PLH) Model venture in the developed Kallang/Whampoa real estate. 4,561 applications were obtained for the 405 four-room apartments readily available, which turns out to an application rate of 11.3. For the three-room apartments, 550 applications were gotten for the 72 units launched, equating to a 7.6 application rate.
Amongst the non-mature estates in the release, which comprises Bukit Batok, Tengah as well as Yishun, five-room flats in Tengah viewed the highest interest, with 2,849 applications gotten for the 670 units offered, or an application premium of 4.3. Huttons’ Lee connects this to customers pursuing much bigger units, which supply more versatility to accommodate combination job also home-based training events. “Tengah has actually consistently brought in numerous consumers for its sustainability motif and closeness to major work centres in Jurong East Regional Centre and also Jurong Innovation Area,” he adds.
Besides the Kallang/Whampoa PLH flats, flats in Queenstown, that include both PLH along with non-PLH units, were also prominent among clients, points out Lee Sze Teck, senior supervisor, study at Huttons Asia.
From a full-year perspective, OrangeTee & Connection’s Sun highlights that the overall number of applicants for all BTO and also SBF sales exercises this year clocked in at 167,119, 16.3% more than the 143,706 applicants logged in 2021. In terms of BTO release, the number of candidates boosted by 22.6% y-o-y in 2022 to 117,251, while the variety of SBF candidates enhanced by 3.7% y-o-y to 49,868.
Sun associates the reduced amount of candidates to a few factors, consisting of customer demand being diverted to the Sale of Balance Flats (SBF). Pointing out information released by HDB, she points out that 25,350 applications were obtained for the 1,071 SBF units readily available in the November sales exercise, converting to an application rate of 23.7. According to Sun, the more powerful demand for SBF units points to an inclination by purchasers for apartments with a much shorter completion duration. “Most SBF flats might be finished quickly than freshly opened BTO apartments in the very same community considering that they are launched in early stages,” she mentions.
However, OrangeTee & Tie’s Sun highlights that PLH condos in Kallang/ Whampoa were a lot more prominent than those in Queenstown, potentially because of their nearer proximity to the business district center. “This shows that there could be several buyer reluctance if the borders of PLH model flats are pressed too far inland, also not everyone is prepared to trade a further place for a long minimum line of work time frame,” she follows.
From a supply perspective, the number of BTO units launched this calendar year jumped by 35.5% y-o-y to 23,184 units, while SBF units released slipped 29.6% y-o-y to 3,023 units. Completely, units released in 2022 amounted to 26,207 apartments, up 22.5% y-o-y.
Other causes for the lower BTO applications might include the cooling evaluates that entered effect on Sept 30. According to Sun, several purchasers may be expecting rates in the reselling market to fall, and are therefore holding back on acquiring a BTO flat just to purchase a completed house in the secondary market.
The number of applications received works out to a general application price of 2.5. This is lower than the 7.8 application cost signed up for the August 2022 BTO sales activity, when 39,136 applications were acquired for 4,993 released apartments.