FLATS in the upcoming Bidadari estate drew overwhelming subscriptions in the Housing and Development Board’s (HDB) November launch of new flats, which saw a warm response overall.
This is a landmark launch for HDB, with a record 12,411 new flats on offer. It is also significant because several policy changes had been introduced before the launch, benefiting Singaporeans across different buyer groups.
The income ceilings were raised from $10,000 to $12,000 for families and from $5,000 to $6,000 for singles, rendering more applicants eligible to purchase new HDB homes. Income ceilings were also raised from $12,000 to $14,000 for executive condo applicants. Existing executive condominiums include The Terrace EC, The Brownstone EC, Signature EC at Yishun while upcoming ones include Parc Life EC Visionaire EC and Wandervale EC .
Among those who benefited are:
- About 2,100 families and 220 singles who took advantage of the higher income ceilings of S$12,000 and S$6,000 respectively; and
- About 1,400 seniors who applied for the 966 units of two-room flats with flexible leaseholds.
Despite their higher prices, flats at the three Bidadari build-to-order (BTO) projects drew the highest application rates among all the projects. Five-room flats were the most popular, with each unit more than 20 times over-subscribed. Four-room flats also saw a fairly high application rate of 5.1 times.
This was in contrast to the Sengkang project Fernvale Woods, which was just about one time subscribed across its different-size units.
Minister for National Development Lawrence Wong said in his blog: “This can be attributed to their central location, presence of two MRT stations and distinctive “Community in the Garden” concept.
“To meet the strong demand, we will be launching more flats in Bidadari next year, with close to 1,600 units in the Feb 2016 BTO exercise.”
PropNex chief executive Mohd Ismail said the positive response to Bidadari was because of the comparatively small supply of five-room flats. Only 151 units were offered, but 3,283 people applied.
“Demand for the larger five-room units most probably came from first-timers who are able to afford it, and who also want a bigger living space as newer BTO flats are shrinking in size.
“Another source of demand for five-room flats could also be from second-timers who prefer a bigger flat for their growing family size. This group of people could have been motivated to upgrade, as their current flats have seen a good price appreciation, which can facilitate the purchase of a bigger flat,” he said.
Others like Ong Kah Seng, director at R’ST Research, had expected that application rates for the Bidadari flats would have been higher.
“The low application rates came mainly from first-timer applicants,” he said. He agreed that it was due to pricing, which likely exceeded what first-timers could afford. This group tends to comprise young couples with limited CPF monies and savings.
Mr Wong in his blog also noted that application rates are stabilising: “We are still keeping a close eye on buyer demand and will adjust the BTO supply accordingly,” he said.
Application rate for two-room flats with flexible leaseholds was at 2.6 times. Overall, the BTO application rate for three-room or larger flats was at 3.3 times. This compared to application rates of 5-6 times at the peak of the property cycle around 2010 due to short supply, said Mr Ismail. But the government had ramped up supply in the last few years and brought application rates down to about two times.
“The response this round is not the norm. It’s boosted by interest in the Bidadari units. At 4.1 times subscribed, sale of balance (SBF) flats also met good interest, due to the larger-than-usual supply of SBF flats which are usually in mature estates,” he added.
Still, Mr Wong gave the assurance that almost all the first-timers will stand a good chance of getting a flat of their choice.
“Notwithstanding the strong demand, for Singaporeans buying their first home, the good news is that the first-timer application rate in non-mature estates is only around 1.6 times,” Mr Wong added.
Non-mature estate flats are more affordable and make up 70 per cent of the BTO flats launched in this round.
The November sale exercise closed on Thursday night.