Most first-time applicants who applied for the Bukit Merah and Queenstown Build-To-Order (BTO) projects are likely to get a queue number to pick a flat.
Both projects, which come under the prime location public housing (PLH) model, saw less demand compared with previous PLH projects.
As at 5pm on Thursday (June 2), three first-time applicants are vying for each of the 1,226 four-room flats at the Bukit Merah Ridge BTO project.
At Ghim Moh Ascent BTO project, located in the mature estate of Queenstown, 2.7 first-time applicants are vying for each of the 671 four-room flats.
In contrast, more than five first-time applicants were vying for each of the 680 four-room flats on offer in the Rochor BTO project – the first to fall under the PLH model – launched last November.
Competition was even stiffer for the second PLH project in Kallang/Whampoa that was launched in February – King George’s Heights – as close to 11 first-time applicants were vying for each of the 294 available four-room flats.
Most of the first-time applicants in the latest projects are likely to be issued a queue number as the Housing Board issues three times more queue numbers than the flat supply, in anticipation of applicants who will drop out during the flat selection process.
This means that if a BTO project has 1,000 available units, up to 3,000 applicants will be issued a queue number.
Both the Bukit Merah and Queenstown BTO projects come under the PLH model, which means owners are subject to a 10-year minimum occupation period and a 6 per cent subsidy clawback clause when they sell their home on the open market for the first time.
At least 95 per cent of the flat supply in mature estates is set aside for first-time applicants.
Those with queue numbers for this BTO launch are then scheduled to book their flats in person at the HDB Hub in Toa Payoh between July this year and April next year.
The dropout rate of each BTO sales exercise averages around 40 per cent. These are applicants who could book a flat but decided not to do so.
However, the Rochor BTO project had a lower dropout rate of 20 per cent, said National Development Minister Desmond Lee last week.
In the current May launch, there were more three-room flats available than applicants in both the Bukit Merah and Queenstown projects. This means that all first-time applicants will likely have a chance to book a unit.
At the Bukit Merah BTO project, prices range from $377,000 to $509,000, without grants, for a three-room flat, and $540,000 to $737,000 for a four-room flat.
Prices at the Queenstown BTO project range from $369,000 to $481,000 for a three-room flat, and $511,000 to $691,000 for a four-room flat.
Both projects have a waiting time of around five years, or 60 months.
Meanwhile, a total of 4,583 BTO flats and 1,952 Sale of Balance Flats (SBF) were launched by HDB last Friday (May 27) in the second sales exercise of the year.
Applications close at 11.59pm on Thursday on the HDB flat portal. The flats will be allocated through balloting.
Home seekers made a beeline for the only mature estate BTO project in Toa Payoh, which does not fall under the PLH model, with more than six first-time applicants vying for each of the 165 four-room flats available.
Those who are hoping to land a bigger unit in the non-mature estates of Yishun and Jurong West face even greater competition.
In Yishun, there were close to nine first-time applicants vying for each of the four-room and five-room flats at a site bounded by Yishun Avenue 2 and Yishun Central 1.
In Jurong West, there were more than eight first-time applicants vying for each of the five-room flats, and five first-time applicants for the four-room flats at a site near to Jurong Lake Gardens and Lakeside MRT station.
Huttons Asia senior director of research Lee Sze Teck said the application rates in the sales exercise this round showed that the distance from the city centre matters.
“The farther from the city centre, the lower (the number of) applications. This is consistent with the land rent theory that price and demand decrease as the distance from the Central Business District increases,” he said.
As the two latest PLH projects drew fewer applications, he said it could be worth looking into whether sites outside the city centre should come under the PLH model.
“Evidently, buyers are not sold on the idea of PLH flats outside the city centre. Perhaps HDB can take a leaf out of the private market’s book and use the definition of core central region as the boundaries for PLH flats,” said Mr Lee.