There has been a number of reports that HDB prices and COV have started to decline in the last few months. Buyers are wondering if they should start their home search now or wait for prices to drop further. At the same time, homeowners are asking if they should wait for prices to rise before selling. What should a potential buyer or seller do?
Looking Back at 2013
The introduction of the Total Debt Servicing Ratio (TDSR) last June caused many to relook their housing plans. TDSR greatly dampened housing demand by limiting the amount of mortgage loan that buyers can get from financial institutions. Buyers who were unable to get loans had to look for more affordable units or put their purchase on hold. This in turn caused sellers to reduce their asking prices or put off their plans till the market recovers.
In the last three years, the government greatly ramped-up the supply of BTO flats. The massive 77,000 flats built during those years, including the 25,000 launched in 2013, helped to clear the backlog of pend-up demand and ensured sufficient number of flats to meet the needs of first-time buyers. Additionally, the Parenthood Priority Scheme (PPS) was introduced last year to increase the chances of couples, who have a child or are expecting, to get a flat directly from HDB. The scheme has benefited almost 100,000 couples so far.
A policy was introduced in 2013 that restricts the purchase of re-sale HDB flats for Permanent Residents (PRs). PRs are allowed to buy HDB flats only after a three-year waiting period. Previously, they were allowed to purchase a HDB flat immediately after getting their residency.
Glazing into the Crystal Ball for 2014
Together the above policies played a major role in dampening demand and hence prices for HDB flats last year. Will prices continue to fall? If so, how much will it fall? Many are also interested to know if the government will start adjusting some of these policies.
The government announced that the supply of HDB flats will be slowed down with effect from this year. To meet the greater demand from singles and the elderly, HDB will provide fewer larger flats but more 2-room and studio flats. It was also revealed that some 90,000 new homes will be constructed in the new towns of Punggol Matilda, Tampines North and Bidadari over the next few years.
STProperty’s upcoming seminar on the 1st and 2nd of March promises insights on how the recently introduced policies for HDB flats will impact the HDB market. Our speaker will also talk about some up and coming areas that potential buyers can consider. Other hot property topics that affect property owners and investors will also be discussed. Let our distinguished panel of experts guide you in making better informed property decisions.
Click here to register for STProperty Seminar.