Image credit: HDB
In the housing landscape of Singapore, the October Build-To-Order (BTO) exercise, which unfolded from the 4th to the 10th, made headlines for an unexpected reason: it witnessed the lowest application rates in years, a phenomenon not seen since 2017.
This article explores the nuances and reasons behind this muted turnout.
What happened during the October BTO exercise?
During the October BTO exercise, a total of 9,848 applicants eagerly applied for the 6,800 new BTO flats offered by the Housing and Development Board (HDB).
Astonishingly, the application rate stood at 1.4 applicants for each available unit, marking one of the lowest rates recorded in recent years. The last time the overall BTO application rates fell below two times was in November 2017, a stark contrast to the relatively healthy subscription rates witnessed between February 2021 and May 2023, ranging from 2.5 to 8.1 times.
To put this into perspective, the February 2023 exercise, featuring 4,428 flats, attracted over 16,000 applicants, while the May 2023 exercise, with 5,495 flats, garnered interest from more than 20,000 potential homeowners.
Read more: 10,000 down and 13,000 more HDB BTO flats to launch for 2023
The take-up rates
Among first-timer families, the most sought-after options were the five-room and three-generation flats.
The application rate for these units was 1.6, indicating a decent interest in these living spaces. However, for four-room flats, the application rate ranged from 0.8 to 1.0 times, suggesting a more reserved response from prospective buyers.
On the other hand, second-timer families exhibited elevated application rates, especially for five-room flats in Tengah and Choa Chu Kang, which experienced rates of 27.0 and 15.3 times, respectively.
Tengah emerged as the hotspot, particularly for five-room flats, with an application rate of 27.0 times among second-timer families.
Contrastingly, Kallang Whampoa, featuring the Prime Location Public Housing (PLH) project Verandah @ Kallang, had the lowest application rate at 1.3 for the 2,922 flats launched, indicating a less fervent response in this locale.
Read more: October BTO exercise: Prime projects in Kallang and Tanglin Halt
Properties for you
3
2
3
2
4
3
5
4
3
2
5
4
4
3
3
2
3
2
3
2
4
2
3
2
2
2
2
2
2
2
3
2
2
2
3
2
4
2
3
2
-1
3
3
3
2
-1
3
2
3
2
-1
3
2
3
2
5
5
3
2
3
2
3
3
3
2
3
2
3
3
3
2
3
2
3
2
2
2
3
2
3
3
4
2
3
2
5
5
Why the lacklustre response?
Analysts attribute the underwhelming response to a complex interplay of factors, including stringent regulations, HFE letter requirements, and the allure of future opportunities.
Let’s take a closer look at the details:
Stricter regulations and uncertainty
One pivotal factor in this muted turnout was the implementation of stricter rules governing the non-selection of BTO units.
These regulations are suspected to have led young couples, perhaps those not yet ready for marriage or contemplating alternative housing options, to abstain from the application process.
Impact of new rules for first-time homebuyers
The introduction of new rules for first-time homebuyers, effective from August 2023, could have also altered the dynamics of the application process.
These regulations imposed consequences on those who declined to book a flat when invited. If such potential buyers refused twice, they would face a one-year ban from participating in HDB sales exercises.
This policy shift could have heightened the pressure on first-time buyers, intensifying the decision-making process and causing them to weigh their options more cautiously.
The HDB Flat Eligibility (HFE) Letter requirement
Another factor contributing to the low application rates could be the introduction of the HDB HFE letter requirement, announced back in May.
This change marked a significant shift in the application process, as applicants now needed the HFE letter before the BTO exercise, rather than after. While it was announced in advance, it still could have caught numerous applicants off guard, potentially impacting the application rates.
Read more: What is HDB Flat Eligibility (HFE) letter and how to apply (2023)
Anticipation for future opportunities
Lastly, the allure of the impending December BTO exercise, showcasing highly sought-after projects in Bishan and Bukit Merah, may have exerted a magnetic pull on prospective homebuyers.
The tantalising promise of these upcoming opportunities could have led many applicants to adopt a wait-and-see approach, preferring to hold back during the October exercise.
Read more: December 2023 BTO: From Woodlands to Queenstown (Project locations and details)
Properties for you
3
2
2
2
2
2
3
3
2
2
3
3
3
2
4
3
5
5
3
2
2
2
2
2
4
3
4
4
3
2
3
2
2
2
3
2
4
2
1
1
3
2
1
1
3
2
-1
-1
3
3
4
3
4
3
4
4
2
3
2
3
-1
1
1
-1
2
3
2
2
3
4
1
1
3
2
2
2
2
2
3
3
5
4
3
2
3
3
3
2
2
2
2
2
3
2
2
2
2
2
2
2
2
2
3
2
2
1
2
2
4
4
2
2
5
5
3
2
3
3
3
3
3
2
2
2
3
3
3
3
1
1
1
1
3
2
3
2
Wrapping up
In the intricate dance of Singapore’s housing market, the October BTO exercise revealed a unique pattern, marked by subdued interest and lower application rates.
As our city-state moves forward, the upcoming December BTO exercise looms promisingly on the horizon, capturing the attention of potential homeowners. So, be sure to keep your HFE letters readily prepared!
The post October BTO exercise witnesses the lowest application rates in recent years appeared first on .
