Singapore cooling measures
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Homes shortage to ease in 2023 as price growth balances post Singapore cooling measures

According to National Development Minister Desmond Lee, price growth in both private and Housing Board resale markets slowed in the fourth quarter of 2022 due to a decline in transaction volume brought on by Singapore cooling measures.

The global outlook is still disturbed due to rising geopolitical tensions and economic downturns in the US and EU. Also, the property markets in Australia, the US, Britain, and Hong Kong are all experiencing major slowdowns.

Increase in real estate sales

However, according to a track record, investors can remain optimistic about Singapore’s real estate market when economies recover.

In addition to launching up to 23,000 more build-to-order flats in 2023, the Housing and Development Board launched more than 23,000 build-to-order flats in 2022.

The number of private residences available under the government’s land sales programme has also increased, reaching 6,300 and 4,100 units in 2022 and the first half of 2023, respectively.

Despite the pandemic, the owner-occupier demand in Singapore remained strong and was backed by resident salary increases.

However, though Singapore cooling measures were implemented, if left uncontrolled, prices may outpace economic fundamentals, increasing the likelihood of a later destabilising correction and making borrowers more susceptible to a significant increase in interest rates.

Singapore cooling measures

Singapore cooling measures were implemented in September 2022 to reduce real estate market demand and promote responsible financing.

These include a reduced loan-to-value cap of 80% for Housing and Development Board loans and an interest rate floor of 3% for applications for eligibility letters for Housing and Development Board loans beginning on September 30. Private house owners must now wait 15 months after selling their homes if they want to purchase Housing and Development Board resale flats.

It followed prior restrictions that increased additional buyer’s stamp duty rates in December 2021 from 12% to 17% for residents purchasing their second residential property and from 15% to 25% for those purchasing their third and subsequent homes.

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I am Tyson Yuk, the founder of the blog Commercial Realty Singapore. With over 15 years of experience, my forte is in the commercial and luxury property line. With my blog, I aim to educate, advise and share tips and tricks with potential property buyers and investors to help them make successful property ventures.

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