By Olivia Siong | Posted: 04 February 2013 2149 hrs

SINGAPORE

Application rates for first-timers rose marginally in the latest Build-To-Order flats sales exercise, the first BTO offering this year.

Applications close at midnight but overall as of 5pm, there were 2.2 first-timers applying for each new unit. This is higher than the 1.8 in the previous exercise in November last year.

It is also the first time since March last year that the application rate for first-timers has gone above two. The application rate then was 2.2.

A total of 3,346 new flats in six BTO projects were offered in the sales exercise.

The projects are in both the mature towns of Ang Mo Kio, Kallang-Whampoa and Tampines as well as in non-mature towns Choa Chu Kang, Hougang and Yishun.

Observers said the increase in first-timer application rates could be due partly to the introduction of the new Parenthood Priority Scheme.

Under the scheme, married couples with children under the age of 16 have priority when they apply for new flats for the first time. 30 per cent of flats are set aside for them.

Another reason could be the de-linking of the prices of BTO flats from the resale flat market, said Chief Executive Officer of PropNex, Mohamed Ismail.

Last week, National Development Minister Khaw Boon Wan made clear that he has de-linked the prices of new flats sold by HDB from the resale flat market.

Mr Khaw said that he has done this ever since he took over the housing portfolio in 2011 to ensure that BTO flats remain affordable despite the rising resale market.

He noted that BTO prices across HDB’s new launches in the past 18 months have been stable, although prices of resale flats have been steadily climbing. This means that the subsidy that the government is giving for the construction and sale of new flats has been growing.

For example, the median resale price of a four-room flat in Tampines in the second quarter of 2011 was S$433,000. This moved up to S$475,000 in the fourth quarter of last year – an increase of about 10 per cent.

In comparison, the starting price of a four-room BTO flat in Tampines was S$288,000 in May 2011. For a similar flat in Tampines in the January BTO sales exercise, the starting price is S$293,000 – an increase of about 2 per cent.

“It becomes a value buy for anybody to pick up a unit in a mature estate…While the resale prices have moved forward, appreciated, the BTO remains affordable, (due to) as what has been announced a greater subsidy. So there’s more incentive for people to pick up a unit in a mature estate,” said PropNex’s Mohamed Ismail.

Five-room flats in Ang Mo Kio were the most heavily subscribed in the latest BTO exercise.

There are 103 units of five-room flats on offer there. As of 5pm, there were 8.1 first-timer applicants and 91.2 second-timer applicants for each five-room unit in the Ang Mo Kio project.

“We can put it down to two reasons. One is because it is in a mature estate and the location is good. The other reason is that the number of flats (offered) is also low, only 283 (in total). Only five per cent is allocated for second timers, and if there are really a lot of upgraders who want to stay in Ang Mo Kio, naturally the numbers would be high because of the supply, which is low,” said Lee Sze Teck, senior manager for research and consultancy at Dennis Wee Group.

There was also strong demand for the project in Tampines. There were 4.9 first-timers and 45.8 second-timers applying for each four-room flat.

– CNA/ir