The supply of new flats will be tapered off from next year, Minister for National Development Khaw Boon Wan said on Monday.
His comments came at the close of the Housing Board's largest-ever launch of Build-to-Order (BTO) and balance flats.
A three-year period of ramped-up supply, which has seen more than 77,000 BTO flats launched, has "begun to restore the balance in our housing market", Mr Khaw wrote on the ministry's blog.
He noted lower cash premiums in the resale market and falling application rates for new flats as signs of this new balance.
The average BTO application rate was 2.9 per flat this year, down from a high of 5.3 in 2010. No figure was given, but he added the tapering off will be done "in a measured way to allow the market to gradually adjust".
ERA Realty key executive officer Eugene Lim expects the pace of building to take a cue from the marriage rate. As previously unmet demand is fulfilled, first- time married couples will once again drive demand for new flats.
OrangeTee head of research Christine Li believes the Government will look to build around 18,000 new flats a year.
Meanwhile, the November BTO launch faced a lukewarm response ahead of its close at midnight last night. As of 5pm on Monday, there were 1.2 first-timers applying for each BTO flat. The rate for second-timers was 2.4, down from a high of 25.9 in November 2011, noted Mr Khaw.
Demand from singles remained strong, with more than 25 vying for each two-room flat.
But Mr Khaw added that this was down from the rate of 57.5 in July, the first time singles were allowed to buy new flats.
Analysts said the overall low demand was unsurprising given the large joint launch, with balance flats - those remaining from previous launches - usually siphoning off some BTO demand.
The BTO flats are also in non-mature estates and not very attractive locations, they said.
First-timer Ms Siti Hajaar, 26, expected little competition when she and her husband applied for a five-room flat in Jurong West. But she did not expect there to be more such units than buyers, as was the case last night: "Hopefully, the chances of us getting the flat are higher."
Meanwhile, there were under four applicants for each balance flat compared with eight per flat in the previous launch in May.
R'ST Research director Ong Kah Seng said this showed "quite keen interest" in balance flats, but this could cool further as resale prices fall.
Get a copy of The Straits Times or go to straitstimes.com for more stories.