High Demand from Singles for Two-Room Flexi HDB Flats in October BTO Launch

High Demand from Singles for Two-Room Flexi HDB Flats in October BTO Launch

October 22, 2024

CONDOsingapore.com

The October Build-To-Order (BTO) sales exercise has seen an overwhelming response from first-time single buyers, particularly for two-room flexi flats, with some projects attracting up to 20 applicants per unit.

The Housing and Development Board (HDB) reported that singles have driven the surge in applications, with nearly 28,200 submissions received across all flat types as of 5 pm on October 21. This marks the highest number of applications since the November 2022 BTO exercise.

In a Facebook post on October 21, HDB projected that total applications could reach between 35,000 and 40,000 by the close of the sales exercise at 11:59 pm on October 23, translating to an average of four to five applicants per flat.

This October launch introduced over 8,500 flats under a new classification framework, categorizing projects as Standard, Plus, or Prime based on factors like proximity to the city center and transportation links. Flats near amenities such as MRT stations and town centers fall under the Prime and Plus categories, which come with stricter resale conditions, including a 10-year minimum occupation period (MOP) and a subsidy clawback of 6% to 9%.

A notable change in this launch is that eligible singles can now apply for two-room flexi flats in any location, a shift from previous restrictions limiting them to non-mature estates. HDB attributed the surge in applications to pent-up demand from first-time singles, who accounted for about 20% of total applications.

“This strong demand from singles mirrors the trend in 2013 when they were first allowed to purchase two-room flexi flats, with application rates reaching 58 times in the July 2013 BTO exercise,” HDB stated. The board expects demand from singles to stabilize as the supply of two-room flexi flats increases.

HDB also highlighted that the high application rate in this exercise is due to the attractive attributes of the projects and the availability of 2,000 flats with shorter waiting times. For example, as of 10 pm on October 21, over 29 applicants were competing for each of the 130 two-room flexi flats in Bukit Batok, which have a waiting time of around two years.

Flats in Ang Mo Kio and Pasir Ris were also popular among singles, with application rates close to the median rate of 22.2 across all projects. For first-time families, the median application rate for three-room and larger flats stood at 2.1, slightly higher than the February and June 2024 launches. HDB expects the overall application rate to remain lower than pre-pandemic levels by the close of the exercise.

Application rates for four-room flats across Standard, Plus, and Prime categories were relatively uniform, with oversubscribed units in Ang Mo Kio, Bedok, and Kallang/Whampoa attracting two to three applicants per unit.

Christine Sun, chief researcher and strategist at OrangeTee Group, noted that the median application rate for singles across Standard and Plus flats was 22.2, significantly higher than previous launches (6.3 in October 2023 and 4.5 in August 2023).

Eugene Lim, key executive officer of ERA Realty Network, pointed out that singles purchasing BTO flats must meet the income ceiling of S$7,000, making a two-room flexi flat their likely sole property purchase. As a result, location is a top priority, and they are less concerned about the 10-year MOP for Prime or Plus flats.

Sun echoed this sentiment, citing high application rates for Plus projects in Ang Mo Kio and Kallang/Whampoa as evidence that many young buyers are willing to accept extended MOPs and stricter resale criteria, even for flats outside prime locations. She also noted that community care apartments were undersubscribed, likely because many seniors opted for two-room flexi flats instead.

HDB added that some projects continue to show low application rates, indicating a higher chance of securing a flat. For instance, application rates for first-time applicants for three-room and larger flats in the Standard project at Taman Jurong Skyline, as well as three-room flats in the Plus and Prime projects of Kallang/Whampoa, were below one.