The HDB scheme aims to help young couples acquire their first home more quickly.
The first Re-Offer of Balance Flats (ROF) exercise held last August witnessed a strong take up rate of 93 percent, reported Channel NewsAsia citing the Housing and Development Board (HDB).
Out of the 1,394 flats offered for sale, 1,300 have been taken up, of which 70 percent were booked by first-time buyers.
Pooling all flats that remain unsold following the previous Sale of Balance Flats (SBF) exercises, the ROF exercise is part of the government’s efforts to help young couples acquire their first home more quickly. In fact, 95 percent of the flat supply offered at the exercise were set aside for first-time buyers.
HDB noted that the August ROF exercise received over 5,500 applications for the 1,394 flats on offer, which makes it oversubscribed by almost four times.
Analysts attributed the robust demand seen at the ROF exercise to the shorter waiting period.
PropNex CEO Ismail Gafoor believes the ROF units “make a lot of sense” for buyers in urgent need of a flat.
“In the month of the previous ROF exercise in August, 71 percent of units were already completed,” he said. “In other words, any of them who are picking up these units are able to collect their keys three to four months down the road, and yet at a discounted price of 20 to 30 percent in comparison to a neighbouring resale unit.”
ZACD Group executive director Nicholas Mak, however, noted that some home buyers are still looking for flats with good location and attributes.
“At first glance, the 90 percent take-up rate is very good. But we must remember that when the first batch of ROF exercise closed in August last year, the application rate was about 4.4 times. That means that for every flat that was offered, there were 4.4 households that applied for it,” he said.
“And considering that not all 100 percent were taken up, it means there were some applicants who were offered the chance to purchase these flats actually rejected them.”
This could be because ROF applicants cannot select the location of units, said Mak.
As at 31 January, about one in five or 265 home buyers have already collected the keys to their new flats. Aside from the August exercise held last year, HDB has rolled out its second ROF exercise this month, while the next exercise is set in August.
Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories, email romesh@propertyguru.com.sg
