SINGAPORE: Many people subscribe to the belief that property prices can only go up. It’s not hard to fathom why: Flash estimates show Housing and Development Board (HDB) resale prices surged 9.6 per cent in 2024, almost double the 4.9 per cent increase in 2023. The private housing market, while more subdued, still grew by 3.9 per cent.
The demand for resale HDB flats also remained strong, with transaction volumes increasing by 8.28 per cent, totalling 27,889 sales.
The government has intervened several times to prevent the resale HDB market from becoming overheated. Most recently in August 2024, the government tightened the loan-to-value (LTV) ratio for HDB loans to 75 per cent from 80 per cent, reducing the maximum amount that home buyers can borrow from HDB.
This came slightly a year after it doubled the additional buyer’s stamp duty (ABSD) for foreigners to 60 per cent. This cooling measure effectively curbed foreign capital inflows, leading to a sharp decline in new private non-landed property sales, which averaged 6,500 units per year from 2022 to 2024, compared with 12,820 new sales in 2021.
The government has also taken steps to ease demand pressures in the Build-To-Order (BTO) market, making a commitment to launch 100,000 flats between 2021 and 2025 to address housing shortages.
In October 2024, it introduced a major change to the BTO classification system, and increased subsidies to ensure low- and middle-income families could afford “Plus” and “Prime” flats in more desirable locations.