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Why was there low interest in Bukit Merah Ridge and Ghim Moh Ascent

Application rates for the two PLH BTOs range from one to four.

Application rates for Bukit Merah Ridge and Ghim Moh Ascent fell below expectation, only receiving slightly above one for 3-room flats and around four for 4-room flats, said property expert, Huttons.

Data from Huttons showed that overall, Bukit Merah Ridge had an application rate of 1.5, whilst Ghim Moh Ascent had 1.3; both were lower than the rates of PLH launches at River Peaks I/II and King’s George Heights which had 3.1 and 5.8, respectively.

Looking at the total number of applications, Bukit Merah Ridge received 657 for its 443 3-room flats and 6,008 for its 1226 4-room flats, whilst Ghim Moh Ascent had 263 for its 196 3-room flats, and 2,629 for its 671 4-room flats.
 
Huttons said the low interest for the two  PLH BTO launches could be attributed to several reasons and one of which is the property’s distance from the city centre.

“The further from the city centre, the lower the applications. This is consistent with land rent theory that price and demand decrease as the distance from the central business district increases,” Huttons said.

It could also perhaps be due to the “ availability of newer resale flats without the PLH restrictions in the vicinity is more appealing than the PLH flats thus capping the number of applications,” added the property expert.

Buyers could also be thinking that both properties do not qualify under the PHL model, or they are waiting for the next Bukit Merah BTO beside the Redhill MRT station to be launched in August, said Huttons.

Meanwhile, the property expert also observed that demand for 5-room flats is significantly higher than 4-room flats which they said is a “clear indication of buyers’ preference for more space.

“Whilst space is a luxury, the past few BTO launches saw that buyers are willing to pay for it. The number of applications for 5-room flats has been higher than 4-room flats,” Hutton said.

“Perhaps instead of using PLH as a blunt policy tool to control prices, a better fix will be to increase the supply of 5-room and even 3Gen flats in mature estates,” the property expert added.

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