Resale flat prices in public housing ticked upwards by 0.5 per cent in the second quarter of this year, as measures to cool the property market took effect, recording the most sluggish pace since 2009.
For the period from April to June, the Housing Board's resale price index rose at less than half the 1.3 per cent that was seen in the first three months of the year.
This slowdown came despite the fact that the second and third quarters are traditionally "hotter" periods for the housing market than the start and the end of the year, when buying and selling slow during festive seasons.
In contrast, the private property market followed traditional trends, with residential unit prices rising faster in the second quarter than in the first.
The Urban Redevelopment Authority's private residential property index showed a quarter-on-quarter rise of 0.8 per cent, up from 0.6 per cent in the first three months of the year.
Analysts noted that the continued momentum in the private market in the face of rounds of cooling measures was partly due to the way developers have countered the curbs by dangling sweeteners and discounts to buyers.
But there were no such carrots in public housing. Second-hand flat buyers have been cowed by the January tightening of the mortgage servicing ratio (MSR), said analysts.
Then, the Monetary Authority of Singapore said that HDB buyers could take on mortgages only where the monthly payments did not exceed 30 per cent of their income, if the loan is from a private bank, and 35 per cent, if the loan is from HDB itself.
Previously, the cap for an HDB loan was 40 per cent, while banks accepted as high as 60 per cent.
This change was in reaction to a reacceleration of the resale market after a seeming normalisation during the first half of last year.
After slowing to just 0.6 per cent in the first quarter of 2012, it picked up speed again in the second half of the year, spiking some 4.5 per cent in six months and prompting the January curbs.
The new MSR policy, said R'ST Research director Ong Kah Seng, makes buyers pay a bigger portion of their purchases in cash.
It makes them less able to fork out high cash-over-valuation (COV) payments. In May, the median COV was $26,000, according to data from the Singapore Real Estate Exchange. This was down 13 per cent from April's $30,000.
The HDB has also been working to halt the resale market in its tracks. It has rolled out more than 20,000 Build-To-Order (BTO) flats every year since 2011, and National Development Minister Khaw Boon Wan made it clear that he has de-linked BTO flat prices from the resale market.
"As a result, the resale market is effectively serving only the upgraders and permanent residents now," said PropNex Realty chief executive Mohamed Ismail.
On Monday, the HDB said it will release 3,800 flats at its next BTO launch this month - the first where singles aged 35 years and older with monthly pay not over $5,000 will be allowed to join the BTO queue for two-room flats.
This policy change, first announced in March, has also siphoned demand from the resale market as some singles chose to wait for the new flats.
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