2 BTO projects draw only 111 on 1st day

Source : Business Times - 01 Jul 2008

Response affected by changes in HDB’s application process

THE Housing and Development Board launched two new BTO projects yesterday with a potential 1,587 flats. But at the end of the first day, only 111 applications were received - a big drop from previous launches this year.

Good value: Four-room flats will cost $223,000-$278,000 at Punggol Breeze (left) and $207,000-$275,000 at Fernvale Residence. The flats will come with all the flooring and fittings completed

The latest launch comprises mainly four-room flats in two projects - Punggol Breeze at Punggol and Fernvale Residence at Sengkang.

The response to BTOs has been affected since HDB changed the application process in May so first-time buyers who reject two offers lose their priority for a year.

But there were still 400 applications on the first day for 1,485 BTO flats at Compassvale Pearl and Punggol Sapphire that month.

Earlier, the 494-unit Punggol Spring BTO attracted 278 applications on the first day of the launch in February.

While the low number of applications this time around may suggest that buyers have become more cautious in light of the weakening global economy, property consultants believe it is more a reflection of the location of the projects.

Recent BTOs have been in the Punggol and Senkang area, says PropNex chief executive Mohamed Ismail. ‘What people really want are different locations.’

ERA Realty Network assistant vice-president Eugene Lim added: ‘It is too soon to launch another BTO in the same area.’

Still, Mr Ismail believes the launches are ‘timely’ because many young couples cannot afford resale flats. ‘Resale flats are traditionally more costly, especially with the island-wide median cash over valuation standing at $20,000,’ he said. ‘Renovations and furnishings usually add to these costs too.’

As such, Mr Ismail expects Punggol Breeze and Fernvale Residence to be at least two-times subscribed - even with HDB’s new policies in place.

Four-room flats will cost $223,000-$278,000 at Punggol Breeze and $207,000-$275,000 at Fernvale Residence.

Mr Lim reckons that with the new supply expected in Sengkang and Punggol, price increase for resale flats there could be limited.

Prices for Fernvale Residence and Punggol Breeze flats are about 20-30 per cent lower than resale flat prices, he said. ‘This is good value as these are premium flats that come with all the flooring and fittings completed, and buyers have but to do minimal fitting out.’