Changes to BTO balloting rules will help cool resale market demand: analysts

Balloting rules for Build-To-Order (BTO) flats are expected to be changed soon to better cater to second-time buyers.

Analysts said this move will help to cool the demand in the resale market.

The changes will also not lead to an oversupply of flats as demand is still strong.

Currently, only 5 per cent of BTO flats are allocated to second-time buyers, and analysts believe that the rate could go up to not more than 30 per cent.

National Development Minister Khaw Boon Wan had said that he hopes to announce some changes to the balloting rules for the next BTO launch in March.

That is when eight BTO projects will be launched in towns like Clementi and Bedok.

Analysts noted that the Cash-Over-Valuation (COV) in the resale market has dropped by about S$1,000 to S$3,000 over the past one to two months. They added that the new regulations will help to reduce the COV further.

David Poh, director at PropNex, said: “When more second timers leave the resale market for BTO, you will find that the resale market, the prices will be able to stabilise even further and you will probably see COV being even more affordable. I think it will probably slide further down a bit more.

“With this in mind, I think it is a good thing, so that the resale market will not be overheated and I am quite sure this new measure will continue to stabilise HDB prices.”

Source : Channel NewsAsia – 24 2012

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