Singles' overwhelming desire for two-room flexi HDB apartments during the October BTO

Singles' overwhelming desire for two-room flexi HDB apartments during the October BTO launch

October 22, 2024

CONDOsingapore.com

During the present October HDB Build-To-Order (BTO) sales exercise, there is an enormous demand for two-room flexi apartments from first-time single homebuyers; in some buildings, there are up to 20 applications per unit.

According to the Housing Board, which as of 5 p.m. on Monday, October 21, had received around 28,200 applications for all sorts of apartments, singles were the primary cause of the spike in BTO applications. This is the most applications since the BTO exercise in November 2022.

By the time the sales exercise ends at 11:59 p.m. on October 23, HDB anticipates receiving between 35,000 and 40,000 applications, which translates to around four or five applications per apartment, according to a Facebook post made on October 21.

More than 8,500 apartments were placed up for sale at the most recent launch in October under a new structure that divides projects into Standard, Plus, or Prime categories according to criteria including accessibility to the city core and transportation.

The Prime and Plus categories, which have more stringent resale requirements including a 10-year minimum occupancy period (MOP) and a subsidy clawback of between 6% and 9%, will apply to BTO units that are located closer to amenities like town centres and MRT stations.

Previously limited to immature developments, the October sales exercise also marked the first time that qualified singles may apply for two-room flexi apartments in any location.

On Facebook, HDB said that a significant portion of the increase in applications is being driven by pent-up demand from first-time singles, who have submitted almost 20% of all applications to far.

"When (first-time) singles were first permitted to purchase a two-room flexi flat from HDB in 2013, the same strong demand for singles was also observed, with application rates reaching a high of 58 times in the July 2013 BTO sales exercise," the statement said.

It anticipates that as the supply of two-room flexi apartments rises, the demand from singles will eventually level off.

Additionally, HDB credited the increased application rate in the October sales exercise to the 2,000 apartments with reduced waiting times and the large percentage of projects with desirable features.

There are 130 two-room flexi apartments in Bukit Batok, with the lowest waiting times of around two years, and as of 10 p.m. on October 21, over 29 people were competing for each apartment.

Singles were particularly drawn to apartments in Pasir Ris and Ang Mo Kio, where application rates were almost equal to the median rate of 22.2 for all projects.

The median application rate for three-room and bigger apartments for first-time families was 2.1, which was somewhat higher than the February and June 2024 launches, according to HDB. The company also said that it anticipates the application rate to be lower than the pre-pandemic norm at the end of the exercise.

"Fairly uniform" application rates were reported by HDB for four-room apartments across Standard, Plus, and Prime.

Four-room apartments in Ang Mo Kio, Bedok, and Kallang/Whampoa were among the overcrowded units, with two to three applicants vying for each unit, according to application statistics on HDB's website.

According to Christine Sun, OrangeTee Group's chief researcher and strategist, the median application rate for singles in both Standard and Plus apartments was 22.2.

Compared to earlier releases, when the median was 4.5 in August 2023 and 6.3 in October 2023, this was much higher.

According to Eugene Lim, ERA Realty Network's chief executive officer, single people purchasing BTO apartments would need to make less than S$7,000 per year. For these individuals, a two-room flexi apartment would probably be their sole real estate transaction.

According to him, location would be of utmost importance since they would probably not be modernising.

According to Lim, "they are not worried about having to commit to a 10-year MOP for Prime or Plus apartments."

In support of his assertion that "many young people do not mind the extended MOP and more stringent resale criteria, even if the flats are not located in prime locations," Sun cited the strong application rates in Plus developments in Ang Mo Kio and Kallang/Whampoa.

The undersubscription of community care apartments, she said, was probably caused by seniors choosing two-room flexi apartments.

According to HDB, low application rates, which suggest a decent possibility of being able to reserve an apartment, are still seen in several developments.

Three-room apartments in the Plus and Prime projects in Kallang/Whampoa, as well as three-room apartments in the Standard project at Taman Jurong Skyline, have application rates below one for first-time applicants.