The Housing Board has cut the number of Build-To-Order (BTO) flats to be offered this year to 15,000, down from the 16,900 it had planned initially.
The move is in the light of the stabilising resale market, the HDB said in a statement yesterday.
Flash figures showed that HDB resale prices fell 0.4 per cent in the second quarter of the year.
Large-scale launches of new flats "have helped to moderate demand and therefore stabilise resale HDB prices", said ERA Realty key executive officer Eugene Lim.
"This is especially so for the Sale of Balance Flats (SBF) launches, as they are typically seen as substitutes for resale flats, given the shorter waiting time to vacant possession," he added.
This is the second year in which the Housing Board is tapering down BTO supply, after three years of ramped-up building from 2011 to 2013.
Last year, planned supply was also revised midway, from 24,300 initially to 22,455.
The supply of new flats this year will be boosted by more than 9,000 flats to be offered in two SBF exercises. This is the highest number of SBF flats launched in one year, up from 6,700 last year.
Of these, 5,387 were offered in May. Another 4,000 will be offered in the next SBF.
That will be held concurrently with the next BTO exercise, which will take place by September and offer 4,860 flats in Bidadari and Punggol Northshore.
As the two exercises earlier this year offered 8,039 BTO flats, the fourth and final exercise of the year is likely to offer about 2,100 flats.
SLP International Property Consultants head of research Nicholas Mak said it was timely to scale back supply, given the response to new flat launches so far. "I think it is necessary to scale back because of the current application rates, or else they will end up having more and more balance flats," he added.
This year's BTO exercises saw strong demand for two-room flats and flats in mature estates, but weaker response to some units.
In May, there were fewer first-timer applicants for Sembawang three-room flats than units available to them.
Including second-timers, there were just 314 applicants for 255 such units.
There was even one case of undersubscription in February, with 767 applicants for 864 four-room flats in Bukit Batok.
This article was first published on July 2, 2015.
Get a copy of The Straits Times or go to straitstimes.com for more stories.