Bukit Merah Ridge, one of the two PLH projects launched in the May 2022 BTO exercise (Picture: HDB)
SINGAPORE (EDGEPROP) - Two prime location public housing (PLH) projects launched during the May 2022 Built-To-Order (BTO) exercise have seen a lower application rate compared to past PLH launches.
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The two PLH projects, which launched for sale on May 27, are the 1,669-unit Bukit Merah Ridge, located in Bukit Merah, as well as the 867-unit Ghim Moh Ascent, located in Queenstown.
As at 5pm on June 2, 6,665 applications have been received for Bukit Merah Ridge. This works out to an average application rate of around 4. Meanwhile, 2,892 applications have been received for Ghim Moh Ascent, translating to an application rate of 3.3.
The level of interest in the two PLH projects is well below expectations, says Lee Sze Teck, senior director (research) at Huttons Asia. The projects' application rates are lower than the past two PLH projects launched to date. The pilot PLH project which launched in Rochor during the November 2021 BTO exercise - the 960-unit River Peaks I & II - saw an application rate of around 8.2.
The subsequent PLH launch during the February 2022 BTO exercise saw even stiffer competition, with the 393-unit King George's Heights in Kallang/Whampoa recording an application rate of over 13.
Lee views that the locations of Bukit Merah Ridge and Ghim Moh Ascent, which are further away from the city centre, could be a cause for the lower interest. “Evidently, buyers are not sold on the idea of PLH flats outside the city centre,” he remarks.
Ghim Moh Ascent is a 867-unit PLH development that will comprise three- and four-room flats (Picture: HDB)
He also notes that the availability of newer resale flats without PLH restrictions within the vicinity of Bukit Merah Ridge and Ghim Moh Ascent could also be a contributing factor to the weaker response. “Buyers also may be waiting for the next Bukit Merah BTO beside the Redhill MRT station in August,” he adds.
Nicholas Mak, head of research & consultancy at ERA Realty, views that the higher supply offered during the May 2022 BTO exercise could have impacted application rates. A total of 1,897 four-room PLH flats were offered in May 2022, compared to 680 and 294 flats in the two earlier PLH projects, namely River Peaks and King Georges’ Heights respectively, he points out.
ERA’s Mak highlights that across the board, both PLH and non-PLH projects in the May 2022 BTO exercise saw higher application rates for larger units.
Besides the PLH projects, three other BTO projects were launched in the May 2022 exercise, located in Jurong West (1,016 units), Yishun (646 units) and Toa Payoh (385 units).
The five-room flats in Jurong West and Yishun saw the highest application rates of 14.2 and 14 respectively. Bukit Merah Ridge and Ghim Moh Ascent also saw higher interest for four-room flats, with application rates of 4.8 and 3.9 times respectively, while the application rates for three-room flats stood at only 1.5 and 1.3 respectively.
Mak believes applicants may be more interested in bigger units, especially for PLH flats, given the long waiting period before they would be able to put them up for sale. “With the 5-year construction period and 10-year MOP for these PLH flats, homebuyers must wait about 15 years from 2022 before they could sell their flats in the resale market,” he points out.
If the applicants are young families or newly married couples, it is likely that the size of their families could expand in the future and they would require more space than what three-room flats typically offer, he adds.
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