With the rise in demand by first-time homebuyers, BTO projects have become the hype for the Singaporean real estate market for quite some time now. New HDB BTO apartments in Singapore are available for purchase under the Build-To-Order (BTO) method. Every three months, the HDB conducts a sales creation of innovative HDB BTO flats in a few different estates. When planning for these apartments, this technique allows the candidate to choose where and when they want to apply. Unless the demand for a certain contract surpasses 70%, the building will not commence. Flats are made to order, so a wait of roughly three to four years is typical. But unfortunately, with labor challenges during Covid, the wait has been stretched even longer to 5-6 years!
Understanding BTOs
A kind of housing project in Singapore is known as BTO or Build-to-Order. BTO apartments are modern HDB apartments with a 99-year lease from the Housing Development Board (HDB). In most cases, BTO units are launched before construction has even begun. Eligible purchasers reserve a unit and make a purchase commitment at each sales event; they then have to wait between 2.5 and 4 yrs for construction to begin.
In addition to apartments, 2-room Flexi apartments, 3-room, 4-room, or 5-bedroom BTO flats, and executive condo Singapore are also available. Parenthood Priority & Multi-Generation Priority Schemes have been implemented to enable prospective purchasers to secure their properties.
In the BTO system, prospective purchasers petition to poll for an opportunity to pick a flat in a planned location(s) of a building. Selected candidates then participate in a registration process where they may choose their chosen apartment type and location. A deposit is necessary to secure a reservation to guarantee that a serious purchaser supports every booking.
These BTOs are known to do wonders in the process of asset progression. To find out more on what is asset progression¸, check out some of our other blogs.
Developments in BTO
Two developments under the Prime Location Public Housing (PLH) plan in Queenstown and Bukit Merah were unveiled on Friday (May 27), totaling 4,583 BTO units.
The Housing and Development Board (HDB) told in a media statement that the other projects are located in Toa Payoh, Jurong West, & Yishun.
The May 2022 Build-To-Order (BTO) & Sale of Balance Flats (SBF) activities by HDB saw the introduction. Bukit Merah, Toa Payoh, Jurong West & Yishun are among the five BTO developments that make up the 4,583 BTO units. The developments in Jurong West & Yishun are good options for those who want to move in sooner. Non mature estates tend to have lower application rates and shorter waiting periods than mature estates, which is why both projects were announced in the May 2022 BTO exercise.
Approximately 1,952 SBF units are ready for purchase in other cities and communities. The PLH apartments in Bukit Merah or Queenstown, for example, will be part of a larger percentage of the BTO flats located in established neighborhoods. Young couples who want to live close to their parents on the same senior estates for reciprocal love and services will have more options.
Demand for BTO
Demand for Build-To-Order (BTO) apartments has doubled in the last year as more couples get married and more individuals decide to buy their own homes. BTO demand for mature estates “consistently greater” than for non-mature estates rose sharply last year, the Housing development Board (HDB) said, according to an official statement published on its website. First-time homebuyers, including families and individuals, fueled the market.
HDB attributed the high number of public housing in Singapore to an increase in the number of weddings and a rise in the number of individuals who choose to live in their own homes. This generation of people conceived in the late 1980s and 1990s is expected to reach marriageable age soon, which will lead to an increase in housing demand. As a result of last year’s population data, the average household sizing decreased from three to two people.
Approximately 60 percent of families had three or fewer individuals last year, up to 44.5% a decade earlier. There has also been an increase in single-person homes, from 12.2% in 2010 to 16.1 percent in 2013. HDB reports an increasing number of young couples, individuals, and parents with grown children opt for their apartments rather than sharing a house for rent in Singapore.
The BTO Projects
Prime Location Public Housing experts predicted high-interest rates in the projects. PLH model apartments’ idea and distinctive selling points, such as its excellent location, capital growth, rental yields, and architectural features, would attract many young Singaporeans. BTO apartments in key locations are scarce, and their long-term investment potential overcomes the severe requirements encountered by buyers of PLH model flats
Two BTO initiatives from two distinct towns were “not altogether unexpected” when included in the PLH model. Adding additional flats within this paradigm is sensible to limit high-value transfers for housing units, given the prevalence of million-dollar acquisitions around Singapore.
Bukit Merah and Queenstown Projects
In addition to Bukit Merah Ridge & Ghim Moh Ascent, the PLH model is being used for these two projects. With the PLH concept, new housing stock constructed in prime and central locations is kept at a Singapore property prices trend these people can afford. Situated in the Health District At Queenstown, Ghim Moh Ascent would be the first of its type in multi-stakeholder engagement to develop integrated solutions that benefit locals in all phases of life.
The Married Child Priority Scheme will reserve up to 20% of the PLH apartments in the two developments for first-time families and 2% for second-time families. Normally, the quota is set at one-third of this amount. Due to the lowered quota, more Singaporeans who don’t have relatives in the region would be able to reside in these neighborhoods.
Additional incentives are granted to all BTO flats in Singapore, and PLH apartments are no exception. Therefore proprietors of these apartments will be required to refund a proportion of the greater the Singapore property prices or value when they sell their homes.
Flat purchasers in Bukit Merah Ridge and Ghim Moh Ascent will be charged a flat recovery fee of 6%, irrespective of when the private property Singapore is sold. The amount to be recouped is proportional to the number of extra subsidies that have been given.
Purchasing a BTO
Individuals are advised to apply to have a better chance of getting a BTO apartment in a non-mature town. Lower completion times for SBF apartments mean that they are more likely to be snapped up by applicants because of the limited supply in each municipality
The Housing Housing and Development Board (HDB) will use a computer poll to select applications rather than a first-come, first-served system. Do not apply in the first couple of hours or the first several days of the registration period for Singapore real estate. The HDB InfoWEB will also track how many applications have been received.
All towns’ total application rate is now shown, which is impacted by locational considerations. Filing application prices will be slanted by a few famous construction activities application rates as more mature estate flats have been initiated in recent years. The mean request rate will be made public by HDB beginning with the May 2022 marketing exercise. If possible, applicants should consult the median utilization and select flat areas with lesser numbers of submissions for Singapore real estate investment.
Future BTO Flat
About 4,900 HDB BTO flats will be available in Ang Mo Kio, Bukit Merah, along with Choa Chu Kang, Jurong East, and Tampines, in August 2022. When they’re ready, we’ll inform and update the readers more on them.
About 9,500 HDB BTO units will be available in towns and cities such as Bukit Batok, Kallang Whampoa, Queenstown, and Yishun in November 2022. As we get closer to the debut, we’ll re-evaluate this amount. The Housing and Development Board (HDB) expects to build 23,000 additional homes in 2022. The HDB InfoWEB has further data aligned with budget 2022 Singapore on the BTO units. As the demand for housing continues to rise, the HDB will change its plans as required.
Conclusion
Considering the current demand for BTO flats, it is safe to say that various individuals all over Singapore are gravitating toward the concept of BTO housing. Initially, the demand rose due to single homeowners and newlyweds wanting to own their properties. However, the domain has expanded, and other groups are also making up for this rising demand.
With a sharp rise in the applications seen in 2020 despite the COVID threat, it was noted that first-time buyers were the majority of individuals who had decided to opt for BTO flats. While it is clear that the demand for BTO flats by HDB is extremely high, and more and more people are moving towards making a purchase, it is also noted that the overall supply for these flats is not aligned with the demand. As a result, with high demand and relatively lower supply, potential buyers are racing to get their hands on the properties.
