As the first-time subscription rate plummets to 1.4, it appears that National Development Minister Khaw Boon Wan has kept his promise of putting first-time applicants first. Does the dip now mean that the minister will concentrate on dispersing the accumulating number of second-time applicants?
(The application rate for first-time home buyers as of November 30, 5pm is 1.4. Image courtesy of Thinkstock.)
The recently revealed 1.4 application rate means the latest batch of 4,200 built-to-order (BTO) flats that received an average of 1.4 applications for every first-timer unit offered. Currently, 95% of units in the projects—situated in Bedok, Bukit Panjang, Hougang, Punggol and Yishun—are reserved for first-time applicants. The rest are for second-timers.
Three-room flats in Bukit Panjang and five-room units in Punggol and Hougang prove the most popular among first-timers, being oversubscribed by four or more times.
The 1.4 figure would surely come as a reward to Khaw, who has been consistently pushing out BTOs this past year. As a result, a record-setting 25,200 BTO flats have been offered in 2011. He recently wrote on his blog of his goal for the first-timer rate to fall below two, saying, “it would mean that almost all first-timers will get a chance to select a new flat… [and] that our ramped-up BTO programme in recent months would have largely cleared the backlog of first-timer applicants.”
Khaw also reiterated that once the first-timer queue has been cleared, he could to shift his focus to second-timers next year.
True enough, the second-timer rate of 23.8 at the latest BTO launch suggests the sector is in dire need of the minister’s attention. The significant difference between the two rates for five-room units at Punggol Waterway Ridges, for instance, is evidence enough. As of the last day of November, the overall application rate was 5.1, with a first-timer rate of 2.9 and a second-timer rate of 48.
For the first time, such figures can be found on HDB’s website, which is updated four times daily and displays the first- and second-time subscription rates at BTO exercises for each flat type, in each project.
Home seekers The Straits Times spoke to found the figures useful despite the rude awakening. “I’d wanted to go for the bigger units, but seeing how they have attracted quite a lot of bids, I decided to go for a three-room unit. At least there's a higher chance and it allows me to ballot smart,” said Kenny Cheng, 26, a bank officer.
Lamented retail assistant Mohammad Firdaus, 33, “The information is good to have, but quite depressing. Subscription rates for second-timers are all sky-high. The best I can do is aim for the less attractive ones; even then, there's no guarantee.”
Indeed, judging by the statistics, industry watchers find it a good time for Minister Khaw to tweak regulations again—this time to benefit second-timers. Dennis Wee Group director Chris Koh said, “The number of first-timers… is a healthy number as, given dropout rates, first-timers now have a very good chance. So it may be time to open more units to second-timers.”
Koh added that the sky-high figure for second-timers might also indicate that resale prices are too high. Second-time buyers do not usually turn to BTO flats because of the resale levy on the sale of their first subsidised HDB unit. “Now [that] they are opting for BTOs, it may be a sign they would rather pay the resale levy for a brand-new flat than high premiums for a resale unit,” he said, adding that resale sellers should take this trend as a signal to price their flats more attractively.
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Related Categories: Market Reports, HDB and Public Housing, HDB
Tags: Bedok, BTO, BTO flat, Build-To-Order, bukit panjang, HDB, HDB flats, Hougang, Housing Development Board, Khaw Boon Wan, Ministry of National Development, MND, public housing prices in Singapore, public housing trends in Singapore, Punggol, Yishun
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