Resale market likely to slow down following new cooling measures: property expert

Specifically, the 15-month wait-out rule will impact homeowners.

Some homebuyers are likely to reevaluate their choices in the property market due to the fresh cooling measures, which could decelerate the resale market, a property expert said.

Mohan Sandrasegeran, senior analyst at One Global Group Research, said private property owners who choose to switch a resale flat may choose to reconsider in view of the cooling measures, specifically the 15-month wait-out term.

“For instance, executive flats and loft units are a form of premium units that garner heavy interest. The buyers of these flats are often unaffected by the excessive pricing and have ample liquidity; but, with the 15-month wait out term for private property owners, their hands are forced, and they may likely think twice about buying such a flat,” said Mohan.

He also said downgraders from private assets who would need to downsize to HDB resale flats could “find themselves in a pickle.”

In addition, Homeowners need immediate finances due to family emergencies or change in job status.

“It was mentioned that the authorities would assess their situation on a case-by-case basis. It would be ideal if special circumstances like these are given proper considerations,” he said.

Mohan, nonetheless, said the new cooling measures would allow financial prudence amongst buyers. 

Subdue roaring prices of HDB flats

For OrangeTee, the new round of measures will tame the prices of HDB resale flats and reduce competition from private homeowners, which will benefit first-timers.

“Over the past month, about 1 to 2 flats have been sold for a million-dollars every other day,” said OrangeTee.

Modifications of total Debt Servicing Ratio (TDSR) were also not surprising since banks’ rates increased interest rates, OrangeTee said.

“Further, it is not surprising that TDSR was revised as the fixed interest rate for many banks has already reached 3 per cent and floating rates are inching towards 3 per cent soon, and both rates may breach the 3.5 per cent (the rate used for TDSR) by end of the year,”  said OrangeTee.

Rise of 4-room resale flats values

Knight Frank Singapore Research Head Leonard Tay sees that the values of HDB 4-room or smaller resale flats will increase as they are not affected by the wait-out period.

The HDB smaller flats are in mature estates and are near train stations, Tay added. 

“After all, a retired couple intent on downgrading from private property after their children have moved on to start families of their own, might be content on a simpler housing arrangement that is close to the amenities common in HDB estates,” said Tay.