SINGAPORE: As property resale prices continue to rise, Minister for National Development Desmond Lee said the government is “not averse” to implementing more cooling measures but hinted these would not be anytime soon as current initiatives should first be allowed to work through the market.
The global economic environment also poses additional uncertainties, including potential trade restrictions, elevated interest rates and a challenging geopolitical landscape, said Mr Lee in a media interview earlier this week.
“If you want to take very tough demand-side measures, you must be mindful of the economic environment and not overcorrect because that would risk causing the market downturn to be sharper than what most home owners would expect,” he said.
Singapore has introduced four sets of cooling measures since December 2021. The most recent, implemented in August, tightened the maximum loan that home buyers can take from the Housing Board.
The cut in the loan-to-value limit from 80 to 75 per cent aimed to dampen demand at the higher end of the public housing resale market.
The change affects one in 10 buyers, said Mr Lee, adding that the government has to “let this measure work its way through” as it has only been a few months.
Another significant measure is the 15-month wait-out period for private property owners before they can purchase a non-subsidised HDB flat. Introduced on Sep 30, 2022, this rule has notably reduced the proportion of private property owners buying high-priced resale flats.
Between Jan 1 and Sep 29, 2022, private home owners made up 34 per cent of buyers of flats sold for a million dollars or more. This has fallen by more than half to about 12 per cent, based on data from January to November 2024.
While he reiterated that the wait-out period is a temporary measure and has “achieved its intended effect”, it will remain in place until the market stabilises, said Mr Lee when asked for his response to some industry players calling for the measure to be lifted.
The government is simultaneously increasing housing supply to address market pressures. A commitment to deliver 100,000 Build-to-Order (BTO) flats between 2021 and 2025 is on track.
Private housing supply is also being ramped up. In the first half of 2025, 8,505 private homes will be made available under the Government Land Sales programme, an increase from the 8,140 units released in the second half of 2024.
“Let the supply and demand-side measures work their way through,” Mr Lee said. “We are not averse to putting in new measures if necessary, because we need to ultimately make sure there’s no property bubble, whether it’s on the private side or the public housing side.”
