Lower application rates for February 2023 BTO exercise

PropNex: Application rates for HDB BTO exercises in 2021 should be stable

The February 2023 Build-To-Order (BTO) exercise which saw 4,428 flats launched for sale on Feb 28, closed yesterday at 11.59pm. HDB data updated as of 5pm on Mar 6 show that the number of applicants stood at 15,234, the lowest amount since September 2019 when the number of applicants was 7,179. An application rate of about 3.44 times was registered, lower than the other BTO launches last year in February, May and August, where application rates ranged from 5.8 to 7.8 times.

Ismail Gafoor, CEO of PropNex Realty believes the more measured response to the latest launch stems from some buyers choosing to wait for other projects that better suit their needs. “Some applicants may be eyeing flats in mature estates such as Bedok and Serangoon which will be launched in the May 2023 BTO exercise,” he comments.The upcoming projects in May will mark the first BTO launches Champions Way Condo in Bedok and Serangoon in the last seven and nine years respectively.

Gafoor argues that Budget measures targeted at helping first-time homebuyers have also had an impact. “The higher CPF housing grants for eligible first-time buyers could have channelled some demand into the resale HDB flat market, leading to what we think is a moderate application rate in this BTO exercise,” he explains.

Tighter rules for buyers who do not book a BTO flat when invited were recently announced, as well as greater priority for First-Timer (Parents & Married Couples) or FT(PMC) applicants. The new rules that will take effect from the August BTO exercise may have prompted buyers to be more careful about which BTO projects they apply for.

The February 2023 BTO projects saw the strongest demand in the Kallang and Whampoa estate, which included a Prime Location Public Housing (PLH) project, registering an overall application rate of about 4.16 times. The other PLH project located in the mature Queenstown estate, saw an application rate of 3.31 times for the 723 flats available. The two projects in non-mature estates – Jurong West and Tengah – had an application rate of 2.73 and 2.84 respectively.

Application rates among first-timer families were relatively low, with HDB data showing 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, giving them a good chance of securing a BTO flat. However, application rates among second-timer families were much higher, especially for larger flats in the mature estates, which saw rates crossing 30 times.

It seems like the application rates are stabilising and the government’s budget measures have effectively channelled some demand towards the resale HDB flat market. This in turn has resulted in more careful selection of BTO projects and higher priority given for FT(PM&C) applicants.