The stellar performance of early Build-To-Order (BTO) flats in the resale market should not be considered a benchmark for future performances, reported The Straits Times. Early owners of BTO flats benefitted from a buoyant resale market and low launch prices, whereas owners of newer BTO flats do not enjoy such favourable conditions.
R’ST Research director Ong Kah Seng noted that the first BTO launches in the early 2000s were priced down to attract home buyers who might have been deterred by their locations. Now, units in these projects are usually sold for more than twice their original prices. However, such proftis may no longer be enjoyed by those who acquired their flats later and at much higher prices.
On the HDB’s 2006 — 2007 financial calendar, four-room BTO flats in Punggol cost between S$173,000 and S$254,000. The price climbed to between S$223,000 and S$327,000 in 2008 — 2009. Once newer units are resold within a year or two, the market becomes much weaker compared to when the earlier BTO flats entered the resale market.
“A surge in resale prices over the next few years is not likely,” said Wong Xian Yang, research manager at OrangeTee. In Q1 2015, for instance, the average resale price of a four-room HDB flat in Punggol stood at S$430,000, and this amount is not expected to increase significantly in the near future.
However, Nicholas Mak, research head at SLP International Property Consultants, believes that later BTO flats in far-flung areas like Punggol, priced at around S$250,000, could still double in value. Still, that is unlikely to happen for BTO flats in sought-after estates, he said.
Cheryl Marie Tay, Senior Journalist at PropertyGuru, edited this story. To contact her about this or other stories emailcheryl@propertyguru.com.sg
