However, the popularity of public housing within mature estates is apparent for BTO flats only. The top five neighbourhoods for resale flats were a mixture of mature and non-mature estates.
Some property experts believe the strong demand for new public housing flats within mature estates could lead to rising resale prices in such areas, reported TODAY.
The Housing and Development Board (HDB) on Sunday (25 July) revealed that the number of new Build-to-Order (BTO) projects in mature estates have increased by almost 50%, from nine in 2017 to 13 in 2020.
Conversely, the proportion of new BTO flats within matures towns also grew from 44% to 55% over the same period.
And while BTO projects are typically oversubscribed, HDB noted that the application rates for projects located in mature estates are not only higher—they have also increased more than those within non-mature estates.
In fact, BTO projects in mature estates saw application rates jump to 6.7 times in 2020 from 2.8 times in 2017. In non-mature estates, application rates climbed to 4.8 times from 2.1 over the same period.
Despite the Government’s efforts to cater to that demand by launching more new projects within mature estates, SRI Managing Partner Ken Low expects future BTO launches within such areas to be hotly contested.
“Those who are unable to secure a unit will spill over to resale HDB flats in these areas or resale or new private residential with support from parents,” he said as quoted by TODAY.
He noted that this trend has pushed up HDB resale prices, particularly those within older residential estates, and led to a hike in the valuation of such areas.
Data from the HDB showed that resale prices increased 3% in Q2 2021, or its fifth consecutive quarterly hike.
“BTO prices will inch up higher in line with the increased valuation of the surrounding resale flats, but they will still remain as the most attractive option for these buyers,” said Low.
Property experts are generally in agreement that it would be very challenging for the Government to meet the housing demand in mature towns, in the short term at least.
While redeveloping older housing estates via the Selective En bloc Redevelopment Scheme (SERS) can help meet the demand for housing, there is a limit on how much land could be recycled under this programme.
ERA Realty Head of Research and Consultancy Nicholas Mak noted that this scheme also opens up the issue of relocating existing residents.
Huttons Asia Research Director Lee Sze Teck, however, said that the popularity of public housing within mature estates appears to be apparent for BTO flats only.
His research indicated that the picture is more mixed when it comes to HDB resale transactions.
Notably, three non-mature estates—Punggol, Sengkang and Woodlands—were among the top five housing estates for resale transactions. The other two—Tampines and Bedok—are mature estates.
Lee attributed the popularity of BTO projects in mature estates to the growing number of resale homes transacting at more than a million dollars.
“It could be why it got people gravitating, hoping that theirs could be the next million dollar flat,” he said as quoted by TODAY.
Demand to non-mature estates could also be driven by moving popular schools to these areas, said Lee.
Mak also suggested widening the price difference between BTO projects at non-mature and mature estates.
Doing so, however, would mean taxpayers monies are spent on higher subsidies. Moreover, the public would complain of the high prices within mature estates, he said.
“There will always be a price to be paid for any of these methods,” said Mak as quoted by TODAY.
Low said the release by the Government of concrete development plans for non-mature estates may help boost buyers’ confidence in the resale potential of such areas. This could eventually encourage them to forego their desire of acquiring homes in mature estates.
“The current generation of buyers are often knowledge-seeking and well informed. They tend to look into potential areas even though they may yet to be developed,” he said.
Cheryl Chiew, Digital Content Specialist at PropertyGuru, edited this story. To contact her about this story, email: email@example.com