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HDB BTO flats draw more second-time applicants amid higher resale prices

THE application rate for HDB's November build-to-order flat (BTO) launch exercise reached 3.0, higher than September's 2.4. This indicates that there are three first-time applications for every flat on offer. The exercise drew more second-time applicants, resulting in a 13.9 application rate. The most popular unit in the exercise is a five-room unit in Bedok Fengshan Greenville, with an application rate of 4.2 for first timers and 54.8 for second timers. There were 707 applications for the 108 five-room units.

Eugene Lim, key executive officer of ERA Realty, says the results are in line with expectations, as second-time applicants turn to the BTO market, deterred by rising resale-flat prices. He notes that resale-flat prices increased 2% in 3Q2012 and achieved new records.

Lim says resale-flat prices should stabilise, owing to the government's cooling measures and a ramp-up in BTO flat supply. He points out that it could be an opportune time for HDB to tweak the ratio of flats allocated for second-timers, as this may help divert demand from the red-hot resale market.

This story first appeared in The Edge Singapore weekly edition of Dec 3-9, 2012.

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