The National Development Ministry has announced that no supply materials for Build-To-Orders would be held in reserve for the year 2022, and the housing board plans to issue 17000 housing units in mature estates.
Real Estate Backed Up National Development Ministry
As the National Vaccination program is going strong, the buyers of real estate are coming in confidence. With the recent announcement by the National Development Ministry for the plans for the years 2020 & 2021, the real estate is likely to see a rush of investors and buyers. According to National Development Minister Desmond Lee, there are no measures to cut the supply of Build-To-Order (BTO) flats in 2022, and the Housing Board is on pace to launch around 17,000 units this year.
Mr. Lee stated in Parliament on Monday (July 26) that the supply of BTO flats for next year will be at least 17,000 units and will not dip below this year’s supply.
HDB is still working with contractors to resolve BTO construction delays caused by Covid-19, he noted.
The Housing Board (HDB) has rolled out additional Build-To-Order (BTO) projects in these prime areas as property searchers continue to focus on flats in mature estates.
According to the Board,13 such initiatives were provided last year, up from nine in 2017 — a nearly 50% increase.
According to HDB, projects in mature estates accounted for 44% of all BTO launches in 2017, while this percentage jumped to 55% last year. Despite a roughly 50% increase in project releases in 2020 compared to 2017, it is still difficult to get apartments in desirable neighborhoods.
Addressing this issue, Mr. Lee said that despite the challenges they’ve faced, the development ministry has continued to work on the BTO launch preparations. Ministry is analyzing demand and keeping an eye on the real estate market for next year’s debut, and will have a number shortly. Having said that, HBD doesn’t plan to lower the number of units distributed next year; we expect it to be around 17,000 or higher.
Increased Demand in Prime Location
Though the real estate industry is hard hit due to the COVID, still there is no slowing down in the demand in certain areas.
Although there is a roughly 50% increase in 2020 compared to 2017, it will still be difficult to find apartments in prime regions. Getting a unit in a popular area like Bishan, Toa Payoh, or Kallang/Whampoa was difficult. In mature estates, the average application rate for a BTO apartment jumped from 2.8 times in 2017 to 6.7 times last year.
Even in non-mature estates, such as Bukit Batok and Tengah, the average rates were 2.1 times in 2017- and 4.8-times last year. In general, demand for new apartments has been strong in recent years, with the number of applications fighting for each BTO unit growing from 2.3 in 2017 to 5.8 last year. Some activities have sparked a great deal of attention. Despite a five-year wait for the project to be finished and a starting price of $602,000, Telok Blangah Beacon in Bukit Merah attracted over 50 applications for each of its 70 four-room flats during its May unveiling.
Covid-19 development delays have resulted in a higher wait time. Earlier, BTO apartment buyers had to wait three to four years for their access to the property. In recent Sale of Balance Flats (SBF) operations, flats in mature estates were equally highly sought. In mature estates, the average SBF application rate is 5.4 times that of non-mature areas, compared to 4.8 in non-mature areas.
Our Key Takeaways
The housing market in Singapore comprises BTO projects and Private Condo. The number of married couples increased from 880,800 in 2010 to 977,300 last year, with more weddings registered in the second half of the decade. Will the newly launched 17,000 BTO projects suffice?
Also, Low HDB BTO unit supply will continue to favour the secondary HDB market as well as the private condo market. The rise in the price of private Condos & property is an indicator of it. The prices shoot up to 3.3 percent in the first quarter of 2021, faster than the 2.1 percent increase in the fourth quarter of 2020.
Recent developments in the BTO units are certainly positive news for the buyers as these recently launched HBD projects will be big steps towards real estate demands