Source : Straits Times – 15 Oct 2009
THE Housing Board (HDB) has been swamped by 20,691 applications for 2,132 completed or near-completed flats – in a sign of red-hot demand for its homes.
Applications for the flats – which are at various locations across the island, including sought-after mature estates – closed yesterday.
The eye-popping figures mean there were almost 10 bids for every available flat – an overwhelming level of demand not seen since the pre-financial crisis property boom, analysts say.
HDB said in a statement yesterday that it had ‘expected strong interest for these flats as they are limited in number, located in the popular mature estates, and are either completed or close to completion’.
About seven out of 10 applicants are first-time flat buyers, said HDB. But despite priority being given to first-timers, the chances of being short-listed to select a flat ‘will not be high due to the overwhelming response’, it said.
Industry observers say this reflects strong demand for readily available flats. These buyers were likely to have been pushed out of the resale flat market, where prices are at historic highs.
Latest estimates showed that HDB resale flat prices rose 3.2 per cent in the third quarter over the second quarter, after an increase of 1.4 per cent in the second quarter over the first three months of the year.
This was on top of a hefty 31.2 per cent price jump in the past two years.
‘The primary attraction of these flats is buyers don’t have to wait – and they don’t need to fork out cash over valuation (COV),’ said ERA Asia-Pacific’s associate director Eugene Lim. COV refers to the cash a buyer must pay a seller above the flat’s valuation – a common practice in the resale market.
The local property market’s revival has led to a steady increase in COV values of late, as sellers factor in future price rises.
The intense demand for the latest batch of flats, launched for sale on Oct 1, extended even to traditionally less popular outlying estates such as Punggol and Sengkang.
For example, 1,022 applications were made for 26 four-room flats in Sengkang – which works out to 39 bids for each flat. Over at Jurong West, there were 905 applications for just 19 four-room flats – 47 times the number of flats offered.
PropNex chief executive Mohamed Ismail said this was because in ‘absolute pricing’, these flats were more attractively priced than their counterparts in mature estates. Four-room flats in Jurong West started from $219,000 and those in Punggol started at $245,000.
Still, even the pricier flats at The Pinnacle @ Duxton – costing up to $553,000 for four-room units and $643,000 for five-room ones – attracted a healthy response.
HDB urged first-time flat buyers who would like greater certainty in securing a flat to apply for its build-to-order (BTO) flats, where 90 per cent of flats are set aside for first-timers.
These flats typically take three to four years to be ready since the HDB builds according to demand.
HDB said its records show that 96 per cent of first-timers get a chance to select a BTO flat within two tries. It also said it will be launching two new BTO projects offering more than 1,000 flats in Sengkang and Jurong West tomorrow.
In the next two months, it will launch a further six BTO projects offering 4,000 flats in Punggol, Sembawang, Bukit Panjang and Dawson.
HDB’s latest sale was under the Sales of Balance Flats scheme, which has replaced the balloting, quarterly sales and half-yearly sales exercises. The HDB will issue one final update on application numbers today at 2pm.
The scheme offers flats left over from earlier BTO exercises, the Selective En-bloc Redevelopment Scheme, and also repurchased flats. Such sales exercises will be launched as and when sufficient flats accumulate, said HDB.
Ngee Ann Polytechnic real estate lecturer Nicholas Mak said the private property boom could also be a factor for the strong demand, as buyers – particularly permanent residents – turn to the resale market. This in turn, pushes first-timers into the flat queues directly to the HDB.
One flat buyer Jeffrey Chua, 30, applied for a four-roomer in Bukit Merah. ‘I know the chances are slim, but no harm trying my luck. It beats buying off the resale market right now.’
MAIN DRAWS
‘The primary attraction of these flats is buyers don’t have to wait – and they don’t need to fork out cash over valuation.’ – ERA Asia-Pacific’s associate director Eugene Lim
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