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, closed yesterday at 11.59pm. Data updated as of 5pm on Mar 6 show that the number of applicants in the exercise was 15,234. This figure marks the lowest number of BTO applicants since September 2019.

Lee Sze Teck, Huttons Asia’s senior director of research, comments that the application rate for the BTO exercise was at 3.44 times, which is higher than the 2.5 application rate registered in the November 2022 BTO exercise. However, the figure is lower than other BTO launches last year in February, May and August, which had application rates ranging from 5.8 to 7.8 times.

Ismail Gafoor, CEO of PropNex Realty, believes that the measured response to the latest launch could be attributed to buyers being careful when selecting projects that best suit their needs. He also forecasts greater pent-up demand for upcoming projects in the May 2023 BTO exercise, as these include the first BTO launches in Bedok and Serangoon in seven and nine years respectively.

Gafoor adds that the recent Budget measures that are more geared towards helping first-time homebuyers could be the cause of some demand being channeled into the resale HDB flat market. This could explain the moderate application rate in this BTO exercise.

The tighter rules for buyers who do not book a BTO flat when invited, as well as greater priority for First-Timer (Parents & Married Couples) or FT(PMC) applicants, could also be a factor. Nicholas Mak, head of research and consultancy at ERA Singapore, states that these changes will make buyers more careful when applying for BTO projects.

The two projects located in the mature Kallang and Whampoa estate, which included a Prime Location Public Housing (PLH) project, saw the highest demand. The projects garnered an overall application rate of about 4.16 times out of the 1,784 available flats.

Meanwhile, the other PLH project in Queenstown recorded an application rate of 3.31 times, while the two projects in non-mature estates (Jurong West and Tengah) had an application rate of 2.73 and 2.84 respectively.

Gafoor notes that the FT(PM&C) category had relatively low application rates, with a median application rate of 0.3 times for two-room flexi flats across all projects and 1.8 times for three-room and bigger flats.

In contrast, application rates among second-timer families were much higher, particularly for The Myst larger flats in the mature estates with rates crossing 30 times.

Overall, the figures from the February 2023 BTO exercise point to a stabilisation in application rates and a greater sense of caution among buyers when it comes to selecting projects. This should give some assurance to applicants in the upcoming launches in May.