Tuesday, December 27, 2011

25000 more BTO flats will be released in 2012

We have entered 2011 with long application queues for Built-To-Order flats and frustrated new weds repeatedly failing to get a flat since all were oversubscribed, sometime 5-7 times. In 2011, with the new Minister for National Development Khaw Boon Wan, BTO practice is shelved for a while and HDB have started to released record number of flats without waiting for a demand to accumulate. 2011 saw 25,000+ releases, nearly more than the last 4 years combined and according to the HDB, 2012 will also see high number of HDB releases:

"Another 4,200 new flats in 7 BTO projects has been launched by HDB today, following its bumper 8,200 flats just two months ago. The latest launch offers new flats in Bedok, Bukit Panjang, Hougang, Punggol and Yishun. This brings the total number of BTO flats offered in 2011 to 25,200 units. HDB will continue to offer another 25,000 BTO units in 2012."
Source :  Another 4,200 New Flats Launched; 25,000 More to Come Next Year

2012 launches will start in January with 3,890 flats offered in Choa Chu Kang, Punggol, Sengkang and Tampines. HDB also signalled that it will look into building more flats in mature towns. Previously HDB was offering new flats only in new towns.

This number is significantly more than 15,000 new weds per year. Newly wed couples are the majority of the first time applicants who had priority up to now. But these numbers show that next year, focus will be shifted to second timers. Actually, Khaw Boon Wan has already wrote about the shift in his recent blog entry:

"There will of course be new first-timer applicants, but their numbers will be below the 25,000 BTO flat supply for next year.  First marriages involving Singaporeans number about 15,000 a year. Currently, we reserve 95 percent of BTO flats for first-timers, leaving only 5 percent for second-timers. Once we have cleared the first-timer queue, we can help the second-timers more. Registration for the current BTO launch will close in a few hours. "
Source : BTO wish coming true?

This development is also very important for secondary HDB market. For who are not familiar, HDB or BTO flats are public housing flats developed by Housing Development Board. Singaporeans can buy brand new flats either directly from HDB or buy used HDBs from owners (resale market). This market is also open to Singapore PRs but both markets are closed to foreigners. 23% of the resale flat buyers are first timers, many frustrated with long queues of new BTO flats or priced out from new flat market (there is a household income limit for new BTO flats). %34 are second timers and %15 are singles. 20% percent of demand came from  Singapore PRs and 8% came from private property owners (Source : Who buys the resale flats?). Since more than 50 per cent of the demand for resale flats come from first timers and second timers, these new BTO flats will remove significant amount of demand from resale market, which is still recording price gains although the transaction numbers are going down.

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