Singapore’s property market has been experiencing a period of strong growth and resilience amid the challenges posed by the Covid-19 pandemic. However, the recent cooling measures introduced by the government in April 2023 have dampened the demand and transaction volumes for both private and public housing sectors.
Private Residential Sector
The private residential market is expected to see moderate price growth in Q3 2023, with upside limited by higher borrowing costs, weaker economic growth, and slower growth in HDB resale prices. The government has also increased the supply of private housing in the 2H2023 Government Land Sales (GLS) programme’s Confirmed List offering 5,160 units, up from 4,090 units in the 1H2023 GLS programme. This will provide more choices for buyers and create more competition among developers.
HDB Resale Sector
The HDB resale sector also saw a slowdown in price growth at 1.2% and demand in Q2 2023, as compared to Q1 2023.
These numbers suggest that the government’s efforts to promote market stability via introducing cooling measures and increasing BTO flat supply have been successful. The cooling measures include raising the income ceiling for eligible buyers of new HDB flats and executive condominiums (ECs), extending the minimum occupation period (MOP) for HDB flats bought with grants from five to seven years, and reducing the loan-to-value (LTV) ratio for buyers who have an outstanding mortgage.
The HDB resale market is likely to see a further moderation in price growth and demand in Q3 2023, as more buyers shift their attention to the new BTO flats launched by HDB. The HDB has launched a total of 17,710 BTO flats in the first three quarters of 2023, exceeding its annual supply target of 17,000 units. The upcoming BTO launches in November 2023 will offer another 4,900 units in various locations such as Bukit Batok, Kallang Whampoa, Tampines and Toa Payoh.
Conclusion
The Singapore property market is undergoing a period of adjustment and consolidation after a strong recovery from the pandemic-induced downturn. The cooling measures have been effective in curbing excessive speculation and ensuring the long-term sustainability of the market. However, there are still pockets of opportunities for buyers and investors who are looking for quality projects or value propositions in both the private and public housing sectors.
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