SINGAPORE: It has been a record year on the housing front, with a bumper crop of 27,000 Build—to—Order (BTO) flats launched in 2012, 2,000 more than originally planned.
This brings the total number of flats launched in the past two years to more than 52,000.
The increase in the number of flats has helped meet the demands of many first—time home buyers.
The overall first—time application rate through the year has largely remained under two to a unit, except for the March launch of BTO flats, which saw 2.2 applicants for each unit.
"The buyers have got a greater number of choices — that means in one tranche you have two, three, four, five thousand houses," said Mohamed Ismail, chief executive office of PropNex. "That means anyone who attempts to apply for a house will be successful and that’s what’s happening now."
A helping hand was also extended to second—time applicants.
In his Committee of Supply speech in March, National Development Minister Khaw Boon Wan said these comprise upgraders, downgraders, and divorcees with children.
Second—time applicants are now allocated 15 per cent of new flats in non—mature housing estates, triple the previous quota of five per cent.
30 per cent of executive condominium (EC) units are also allocated to second—time applicants.
"The priority is right, to take care of the first timers, then the second timers and then we have to see what kind of demand is there for the second timers," said Liang Eng Hwa, deputy chairman of national development in the Government Parliamentary Committee.
"I think we have to distinguish between those that are having genuine housing needs versus those that are there to buy the property as investments and to take a view of the market. So I think what measures the government has introduced is the right way to go, where you distinguish between the genuine home buyers and the speculators. I think we have to continue to have this supply of housing so that the signal is there that the supply will be there to meet the demand, be it pent up at this point."
Mr Liang added: "At this point in time, the demand is still very strong. I think the numbers we’re building are able to meet the first—timers’ (demand), but I’m not so sure we’re able to meet the second—timers. So I think the programme to ramp up housing should continue."
There were 25.6 second—time applicants for each unit launched in January. This dropped to 13.9 in the last BTO launch in November.
The second—time application rate dropped to a low of 9.5 in May, the lowest for the year.
In a blog post in September, National Development Minister Khaw Boon Wan said it is still early days.
The results of policy tweaks may only be seen next year.
In his speech in Parliament in March, Mr Khaw said the policy tweaks should cut the application rate for second—timers from more than 25 to a single digit.
The Housing and Development Board (HDB) had also estimated the rate will drop to eight or nine applicants per flat offered.
Mr Ismail commented: "It is worth considering for next year, to increase the percentage for the second—timers at particularly the non—mature estates from the current 15 per cent to probably at maximum 30 (per cent), to be in line with ECs. But not necessarily at one go, maybe we can increase it from 15 to 20 and then maybe 30 per cent."
Donald Han, special adviser of HSR Property Consultants said: "(Second—time applicants) are generally very eager to get into the BTO market, but have not been successful. Any inability to meet demand for second—timers will see potentially some of these entering into the resale market, which will put further pressure onto resale prices, which have been hovering at record prices over the past five to six years."
The resale price index reached a record high this year, along with the first public housing resale unit to cross the million—dollar mark.
The ramped up supply of new flats is expected to cool the resale market in the future, though analysts say next year’s commitment to roll out at least 20,000 flats is a cautious move from the government.
"It sends a signal that they want to be cautious in view that the market might experience some form of a slowdown and at the same time not want to oversupply BTO flats, which will create a bottleneck of supply in 2015 when they are completed," said Mr Han.
"That being said, if the demand exceeds expectations, there’s every reason for the government to react immediately to be able to bump up supply beyond the 20,000 if need be."
Looking ahead, observers say it may also be time to start addressing the needs of singles.
The Prime Minister had said in his National Day Rally speech that the government is looking into whether singles will be eligible to buy flats directly from HDB.
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