Is the cooling measure to blame for the decline in HDB resale volume?

HDB resale volume fell 14.9% MoM in September.

Real estate experts are mixed on whether the government's cooling measures had an impact on resale transactions in September. In September, HDB resale volume dropped by double digits to 2,217 units. 

According to PropNex, the reduction of the Loan-to-Value (LTV) limit for HDB housing loans by five percentage points could have "led some buyers and sellers to hold back from transacting" to monitor the measure’s impact on the market. 

OrangeTee also agrees that the LTV reduction could have led to a temporary pullback in demand, resulting in a drop in transactions. 

"Some buyers may require time to evaluate their loan options or seek ways to secure more financing," OrangeTee said. 

Huttons, however, disagrees that the cooling measures were the reason behind the lower transaction volume in September, explaining that it takes "around two months from submission to acceptance in the HDB system." 

Huttons attributed the lower September volume to "less supply of homes for sale." 

“With supply constrained, transaction volume is lower. Sellers are aware of their stronger bargaining power and held on to their asking prices," Huttons said. 

"In the process, buyers had to pay higher prices, and HDB resale prices in September 2024 increased at a faster pace of 1.8%," Huttons added. 

Apart from the cooling measures, PropNex said factors such as the upcoming Build-to-Order (BTO) sales exercise in October may have also weighed on resale transactions in September. 

OrangeTee shared a similar view, saying the resale market "will continue to face competition in October as a substantial number of flats will be put up for sale during the upcoming BTO launch." 

"Many prospective buyers are likely to be drawn to the new BTO flats, especially since this will be the inaugural launch of the Plus flats, and singles can purchase new BTO flats outside of non-mature estates," the expert added.