ST : Less demand for new flats as measures bite

Sep 14, 2010

Less demand for new flats as measures bite

Yishun BTO project attracts fewer than three buyers per unit, well below the usual

By Jessica Cheam

MEASURES to cool the property market appear to be having an effect going by the lower level of demand for a new build-to-order (BTO) development.

The Yishun Riverwalk project attracted 3,225 applications for 1,408 flats - well below the ratio seen in past BTO launches when up to six times the number of bids were seen for each unit.

Demand for four- and five-room flats - typically more popular - was slightly under three applications for every unit. Four-roomers received 1,608 applications for 652 flats while the 252 five-roomers attracted 718 bids.

But demand was still robust for HDB's sale of balance flats, which offers homes ready for occupation within months.

The HDB received 10,968 applications for 1,624 homes on offer - almost seven for every flat.

Both sales launches closed yesterday.

Industry analysts say the flatter demand for new flats indicates that the cooling measures introduced two weeks ago have started to bite.

BTO launches held over the past couple of years have attracted up to six applications for every flat.

ERA Asia Pacific associate director Eugene Lim said the lower-than-usual demand could be due to location and the recent measures.

First-timers are likely also returning to the HDB resale market in anticipation of falling prices, he said. These buyers had found themselves priced out of the resale market amid the property boom and flocked to join the queue for new HDB flats.

'But now buyers are waiting to see if prices will drop. Those who have a need for homes will go to the resale market instead of queueing for a new flat which takes three years to build,' said Mr Lim.

Robust application numbers also do not necessarily translate into actual demand.

The HDB said recently that despite an overwhelming number of applications for landmark projects at Dawson, first-time buyers have been dropping out. It said that 23 per cent of first-time applicants did not select flats even though they were invited to.

The dropout rate was even higher on the first day of the selection process, with 25 per cent of first-timers declining the opportunity to secure a unit. The main reason given was that their choice of unit had been sold or they wanted to 'reconsider other housing options'.

Demand could drop further given the ample choice of homes as the HDB boosts supply.

Meanwhile, a residential site at Bedok Reservoir Crescent will be launched for sale today under the HDB's design, build and sell scheme (DBSS).

The site, which is near established amenities, has a gross floor area of 502,362 sq ft that could yield 430 homes. The tender closes on Nov 2.

Under the DBSS, private developers build public housing flats that come with condo-like finishes.

More buyers are also eligible for DBSS flats after the Government recently lifted the $8,000 monthly income ceiling for such buyers to $10,000.

jcheam@sph.com.sg

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WAIT AND SEE

'Now buyers are waiting to see if prices will drop. Those who have a need for homes will go to the resale market instead of queueing for a new flat which takes three years to build.'

ERA Asia Pacific associate director Eugene Lim