Applying for a BTO: Does the early bird really catch the worm?

New BTO (Built-To-Order) launches, more often than not, are met with an almost frenzied fervour by eligible couples and singles. More so in recent years due to several factors.

Younger Singaporean couples are more eager to have their own place, perhaps a result of having experienced COVID-19 fatigue from being in a shared space with their families for much too long. The expected completion dates of various BTOs have also been pushed back due to construction material and manpower issues. Also, an often overlooked, but equally significant contributing factor is the “hyping” of certain areas by popular property websites which further add to the frenzy.

In 2020, every BTO exercise saw massive oversubscriptions, some even within 24 hours from launch. Last year, HDB announced the Prime Location Housing (PLH) model as part of its cooling measures. With these new measures, potential applicants started to “wait and see” and for some couples, they are in dilemma whether to apply for a BTO within prime locations as it has become a “16-year decision”, with a 6-year construction time and 10 years MOP (Minimum Occupation Period).

Hence, if you’re considering applying for a BTO this year, taking a step back and waiting might just be in your best interest.

1. Patience is a Virtue

It’s a misconception that HDB BTO ballots are allocated on a first-come first-serve basis. Applications are collated at the end of a 1-week application period, before HDB’s in-house algorithms randomly decide on successful ballots. In short, a person who applies the very moment a BTO launches has the same probability of success as someone who applies on the very last day.

So why wait?

For one, it allows you to monitor the popularity of the BTO launch you’re considering. The more popular it is, the lower your chances of getting a successful ballot and the unit of your choice. The number of applications for each launch is publicly available and updated on the HDB website at 8am, 11am, 2pm and 5pm daily.

Monitoring these numbers give you a better overview of the more popular launches, and the ones that are less subscribed. This lets you know the probability of your ballot being successful, lower for more popular launches, higher for less popular ones. This, of course, is not as relevant if you qualify for priority schemes such as the Married Child Priority Scheme (MCPS).

2. Waiting may mean more options

As mentioned earlier, multiple external forces have resulted in the oversubscription of BTOs even in the traditionally less popular areas. Waiting, in this case, can help you manage your expectations and potential disappointment, while allowing you time to consider other options; these include resale flats, which gives you the freedom to choose a home in a location and level you want, or the inevitable release of Sale-of-Balance Flats (SBF) at a later date.

If you are not in a hurry to obtain a flat, you can consider paying $10 to apply for a project in a non-mature estate to rake up your chances for the subsequent BTO launches, even if you do not successfully get a flat this round.

After 2 unsuccessful applications for BTOs in a non-mature estate, you get 2 additional ballots for every subsequent unsuccessful round, increasing your probability of getting a home exponentially. It is, however, important to note that if you decline 2 opportunities for flat selection (if you’re that lucky), you will be barred from applying for a BTO for 1 year.

3. To wait or not to wait? That is the question.

In conclusion, if you’re not explicitly set on a particular BTO launch, applying a level of patience when purchasing a home can be a good thing. It is equally important to consider other variables, such as the current extension of construction periods due to COVID-19, Minimum Occupancy Periods, extremely high demand, and the lower supply of BTOs, in your overall decision-making process. While waiting for the release of Sale-of-Balance flats can also present surprisingly ideal options for those who exercise patience, there is a likelihood that you can be left with units that are less than desirable.

If this is not something that you can stomach as of yet, perhaps gunning for a BTO unit may not be your best option.

Hence, keeping your options open and having a look at what is available on the resale market may also lead to your dream home. As you continue your search for the right property/location, it is recommended to get an in-principle approval (IPA) done with a mortgage advisor to ensure your home financing journey is a breeze!

Clive Chng
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