Govt taking steps to slow rental, resale property markets
Singapore – The resale property market including the rentals of private and HDB market has seen prices rising in the last few years since the covid 19. During the early periods when Singapore was in a lock down due to the virus, property transactions were done via online viewings.
Ever since then the secondary market is seeing steady increase in prices in the resale HDB and rentals are now at and all time high.
The price increase is attributed to the delayed construction of the Built To Order(BTO) flats. Sellers are holding on to their current flats while waiting for their new flats to be ready. By doing so, there are increase demand from buyers in the resale market amidst the low supply of houses.
Still early signs of rental resale markets slowing down
In the Straits Times dated 26th March 2023, the National Development Minister Desmond Lee said that it will take about 2 years to clear the current backlog of the delayed construction of the BTO flats. He also said that there are early signs for both the resale and rental markets to slow down.
He said,”It is still in its early days but we are beginning to see some possible plateau of resale prices. Sellers are seeing a little price resistance from buyers.” He also added that he is seeing these happening on both resale and rental markets during his interview with the The Sunday Times on the 20th of March 2023.
Few rounds of cooling measures
A few rounds of cooling measures were introduced. The first one was announced on December 2021 and September 2022.
The latest one was a 15th month waiting period for private property owners who wish to downgrade to a HDB resale flat. This was to target at moderating demands of HDB flats.
Significant progress seen
The backlog of the BTO Projects that were delayed due to COVID 19 related factors has seen much progress as the Housing Board steps up construction works. About 60% of the delayed projects has been completed over the last 2 years.
Last year more than 20,000 hdb flats were completed and an estimated 17,000 sets of keys were collected.
The work is not done yet, as the Minister Desmond Lee shared. More new flats are in the pipelines as the HDB plans to launch another 100,000 flats between 2021 and 2025.
Plans to launch flats that has shorter waiting time to under 3 years from 2024 onwards.
At the peak of the COVID 19 pandemic the waiting time for a BTO flat was around 4 to 5 years compare to the the pre pandemic waiting time of 3 to 4 years. The median waiting times in the last 2 years from 2022 has been affected.
With Singapore gaining its normalcy and resumption of construction BTO flats, HDB aims to assure buyers that they do not have to wait too long for their flats.
He also highlighted that complains on the ground regarding the difficulty on securing a new BTO due to the high number of BTO application has risen sharply since 2020.
The Minister Desmond Lee noted that application rates has started to moderate in the last 2 sales exercises. There were fewer applicants in the the February 2023 launch exercise. There were fewer first timer applicants as compared to the last 3years.
Keeping an eye on the application rates
His ministry will keep a look out on the first timer application rates in the coming BTO launches.
He added that the upcoming May sales exercise will include flats in the mature estates of Bedok and Serangoon. These 2 areas has not seen any new flats being launched in the last 7 to 9 years respectively.
A new BTO launch generally happens 4 times in a year; February, May , August and November.
The sharp spike of BTO applicants in the 2020 exercise were pandemic-induced. Potential buyers were worried seeing the construction numbers go down while waiting times were longer. Making them bring forward their application. As the prices of resale prices go up, it drove a certain psychology to the potential buyers.
Mr Lee also added that while there are challenges ahead of finite fiscal and land resources, he gave the assurance that the Government is committed to meeting Singaporean’s housing aspirations at the same time keeping it affordable and accessible and with all these steps taken to slow rental and resale property markets.
“article summarised from the Straits Times 26th March 2023.”