Time-wasters steer clear of BTO projects

Source : Straits Times - 6 Jun 2008

HDB’s two new projects still oversubscribed but at half the level seen before change of rules

IT LOOKS like the time-wasters have got the message after the Housing Board tightened rules for flat applications.

The launch of 1,485 premium flats in Punggol and Sengkang closed on Wednesday with 4,050 applications - still oversubscribed but at about half the level seen before the new rules kicked in.

Some sales launches had become free-for-alls, with thousands of people who had no real intention of buying still lodging applications just to keep options open.

This was evident in the actual take-up rate for flats, which was sharply lower than the number of applicants.

Apart from creating an administrative headache for the HDB, such frivolous applicants also meant deserving buyers were pushed further back in the queue.

Now, a first-timer who twice rejects an offer to buy a flat at a build-to-order (BTO) or balloting sales exercise will lose his first-timer priorities for a year.

In other words, he will be sent to the back of the queue with the second-timers.

The shake-up has certainly made first-time buyers like Ms Lynne Huang, a 25-year-old teacher, more cautious.

‘The new rule is quite harsh, so home buyers like me really have to think twice before applying for any project,’ she said.

‘If I apply, it’s likely that I will buy a unit unless it’s on a very low floor.’

The amended regulations have raised fears that buyers offered leftover flats would be penalised, but the HDB has said it could be flexible if applicants at the back of the queue have good reasons for rejecting available homes.

HDB’s new rules had their first try-out in two new projects - Compassvale Pearl in Sengkang and Punggol Sapphire.

They were offered under the BTO system where flats are built once a certain level of demand is reached.

Compassvale Pearl received 977 applications for the 420 flats on offer, and Punggol Sapphire attracted 3,073 bids for 1,065 flats.

That put the ratio of applications to flats at 2.3 in Compassvale Pearl and 2.9 in Punggol Sapphire - roughly half the figure for projects launched earlier this year.

Applications for the Punggol Spring sale in February and Jade Spring @ Yishun Phase 2 in March were about five times the number of flats offered - or five would-be buyers for every home.

Punggol Spring received 2,765 applications for 494 flats, and Jade Spring @ Yishun Phase2 had 2,828 bidders for 576 flats, the HDB told The Straits Times.

Housing experts had anticipated the dip in applications following the rule change, but they still expect the take-up rate to remain strong due to real demand in the market.

PropNex chief executive Mohamed Ismail said buyers are now showing discretion in their applications.

‘But I think the more interesting thing to watch is the actual take-up rate, if demand continues to meet the supply,’ he said.

Mr Colin Tan, head of research and consultancy at Chesterton International, believes there is ‘a lot of pent-up demand’ in the market and it was likely the HDB could even see higher take-up rates from more serious buyers.

In the second half of last year, buyers took up about 54 to 72 per cent of flats in new HDB projects in Punggol, Sengkang and Bukit Panjang.

Unsold stock has reached an all-time low of 1,200 flats - a stark contrast to the 25,000 unsold flats at its peak.

HDB is ramping up supply to about 8,400 units this year - 40 per cent more than last year’s new supply.