October 2023 BTO exercise sees underwhelming response

Applications will be closing for the October 2023 Build-To-Order (BTO) exercise at 11.59pm on October 10, offering 6,800 flats in Queenstown, Kallang-Whampoa, Choa Chu Kang and Tengah, including two Prime Location Public Housing (PLH) projects.

However, response to the exercise has been underwhelming, according to Lee Sze Teck, senior director of data analytics at Huttons Asia. HDB data as of 5pm on Oct 10 show that only 9,848 applications have been received, as compared with more than 16,000 applicants and over 20,000 applicants respectively for the February 2023 BTO exercise and May 2023 BTO exercise.

He believes that the lack of enthusiasm could be due to the penalties for non-selection of flats that have kicked in with this exercise. First-timer applicants who reject their chance to book a flat, will be considered a second-timer and be given lower priority for a year. In addition, for the second-timers who have one non-selection count, they will have to wait for one year before they can apply for a flat again.

Ismali Gafoor, CEO of PropNex Realty, notes that the October BTO exercise has an overall subscription rate of around 1.4 times, which he claims to be one of the lowest BTO application rates in recent years. The last time overall BTO application rates were less than 2 times was in November 2017 for the 4,829 flats launched.

Gafoor further explains that the October BTO projects in Tengah (Plantation Edge I & II) saw the highest subscription rate of 2.1 times. Tengah projects are located right in front of the future Tengah Park MRT Station on the Jurong Region Line, and applicants were likely vying for the five-room flats available, plus the shorter waiting times of 3 to 3.3 years.

Choa Chu Kang project (Rail Green I & II) was the second-highest overall application rate at about 1.6 times. However, it is still lower compared to the Keat Hong Grange project launched in August 2022 BTO exercise which achieved an overall application rate of 2.4 times.

Mature estates, such as Kallang-Whampoa and Tanglin Halt Cascadia PLH project, were met with a more muted response. The Kallang-Whampoa projects, including the 1,143-unit Verandah @ Kallang PLH project, achieved an overall application rate of about 1.3 times, lower than Farrer Park Arena project in May 2023 which obtained an application rate of 3.6 times, and the projects in February 2023 (Farrer Park Fields and Rajah Summit) with an application rate of 4.7 times. Tanglin Halt Cascadia PLH project observed an overall application rate of 1.1 times.

Given the lower application rates, most first-timers stand a high chance of securing a flat. The first-timer application rate for most projects’ four-room flats ranges from 0.8 to 1.0 times, whereas five-room flats stand at approximately 1.6 times. Three-room flats range from 0.2 to 0.8 times.

However, some buyers may opt to hold out for the December 2023 BTO exercise that will see the long-awaited flats at Sin Ming in Bishan and Alexandra Vale in Bukit Merah put up for sale.

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Overall, the October 2023 BTO exercise provides applicants the opportunity to consider various flat needs and options across a range of estates and locations with a higher chances of success.