TLDR; Public housing will remain affordable for Singaporeans. Cooling measures are implemented to regulate healthy transactions and keep price hikes at bay.
According to data from real estate portals like 99.co and SRX, HDB resale flat prices grew at a faster pace of 1.2 per cent in September, compared with August’s 0.4 per cent.
The delay in HDB Build-to-order (BTO) flats completion has driven many young couples and singles (above the age of 35) to look at resale HDB flats along with private residential property downgraders, the extensive pool of demand is causing a bidding war which inflates the resale property prices.
The number of private residential property owners who have downgraded to HDB resale flats doubled in 2021 and the first three quarters in 2022 compared to 2019 and 2020. These downgraders make up 1 in 10 buyers in the HDB resale market today.
Cooling measures in Dec 2021 and Sep 2022
Previously in December 2021, a package of cooling measures was implemented. The measures include raising Additional Buyer’s Stamp Duty (ABSD) rates, tightening the Total Debt Servicing Ratio (TDSR) threshold and lowering the Loan-to-Value (LTV) limit for loans from the Housing and Development Board (HDB), said the Ministry of Finance, the Ministry of National Development and the Monetary Authority of Singapore in a joint press release.
The agencies said that the measures for private residential are calibrated to diminish demand, especially from those purchasing property for investment rather than for their own stay.
On Sep 20, a fresh round of property curbs aimed at cooling the public housing market was introduced. This includes a 15-month wait-out period for private property downgraders who wish to buy an HDB resale flat and more stringent criteria in assessing home buyers’ loan amounts.
Analysts said the full effects of the latest cooling measures will take some time to reflect in flat prices and transaction volume but are widely expected to moderate demand for larger units and cooling prices.
The government’s commitment
Minister of National Development Desmond Lee, speaking in Parliament on Tuesday (Oct 4), said, “This Government will intervene and do what is necessary to ensure affordable public housing for Singaporeans and a stable property market.”
“The Government is committed to the stability of the wider Singapore property market, and to keeping public housing inclusive, affordable, and accessible to Singaporeans,” he said.
Lee noted that the average price for a new four-room flat in a non-mature estate has remained relatively stable at $341,000 in 2019 and $348,000 in the first three quarters of 2022.
In addressing the demand for housing, he pointed out how HDB has ramped up BTO supply and is on track to launch 23,000 flats per year in 2022 and 2023, a 35 per cent increase from 2021.
“We are prepared to launch up to 100,000 flats in total from 2021 to 2025 if needed. We also endeavour to launch more projects with shorter waiting times of less than three years where possible,” Mr Lee added.
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