Minister Said There Are Early Signs of Rental & Resale Property Slowing Down

It is no doubt that housing gives Singaporeans a headache.

From delayed Build-To-Order (BTO) flats to expensive properties, housing is a touchy subject for some people.

However, there’s some good news.

What National Development Minister Desmond Lee Has to Say

According to National Development Minister Desmond Lee, there are some early signs that both the resale and rental markets are slowing down.

These developments come as the cooling measures introduced in December 2021 and September 2022 work their way through the market.

The most recent cooling measures were implemented in September 2022, which include a 15-month waiting period for private property downgraders and tighter housing loans. 

If you recall, many BTO projects were delayed by the COVID-19 pandemic.

However, the Housing Development Board (HDB) is progressing well in clearing the backlog of delayed BTO projects.

According to Mr Lee, HDB has completed about 60% of the delayed projects over the past two years.

In addition, new flats are on the way.

HDB is aiming to launch up to 100,000 flats between 2021 and 2025.

This includes launching more BTO flats with waiting times below three years from 2024.

If you didn’t know, the waiting time for a BTO flat was around four to five years at the pandemic’s peak.

He added that about 2,000 to 3,000 such flats will be launched annually by 2025.

He told The Sunday Times, “With the resumption of some normalcy and BTO flats with waiting times under three years commencing again, we aim to bring down the waiting times and give people the assurance that they don’t have to wait too long for their flats.”

What About High BTO Application Rates?

Since 2020, the number of BTO application rates has increased sharply, causing some applicants to be unable to secure a flat.

However, Mr Lee noted that BTO application rates have started to moderate, as seen in the last two BTO exercises.

Notably, the latest launch drew fewer first-timer applicants compared to launches in the past three years.

The sharp increase in BTO application rates was partly due to our best friend, COVID-19.

During the pandemic, potential buyers saw a decrease in construction numbers and an increase in waiting times, prompting some to bring their applications forward due to the fear of not securing a house.

He said, “People were worried about whether they can get housing. They saw resale prices go up and that drove a certain psychology. It’s perfectly understandable because of the crisis.”

BTO launches usually happen four times a year in February, May, August and November, if you want to mark the dates down on your calendar. 

The upcoming May sales exercise will launch new flats in mature estates like Bedok and Serangoon.

The estates have not seen new flats in seven and nine years respectively.

Mr Lee noted that flats launched in popular areas like matured estates would see greater interest.

However, he assured that the Government is committed to meeting the housing needs of Singaporeans. 

He said, “Housing a nation has become part of our psyche, our social compact. While we keep addressing challenges that we face, fixing problems and improving our public housing system so that it remains relevant for Singaporeans today and tomorrow, we must continue to ensure that housing remains affordable and accessible.”

Stricter Penalties for First-Time BTO Applicants

If you didn’t already know, there will be stricter penalties for first-time BTO applicants who don’t select a flat from the August sales exercise in 2023.

Applicants who fail to select a flat upon successful application will be considered second-timers for a year in the computer ballot. 

It’s a big deal since first-time applicants have a better chance of balloting.

First-time applicants get two ballot chances.

Meanwhile, second-time applicants are only given one.

Furthermore, up to 95% of BTO flats are reserved for first-timers.

Mr Lee announced the stricter penalties on 2 March.

These changes aim to ensure a more efficient allocation of BTO flats.

However, it’s not all bad.

New initiatives to help first-time applicants were announced as well.

Besides offering more BTO flats in mature estates, first-time family applicants with children or married couples aged 40 and below will get three ballot chances from August 2023.

In addition, up to 40% of BTO flats and up to 60% of Sale of Balance (SBF) flats will be reserved for applicants under the Family and Parenthood Priority Scheme.

Signs of a Softening Rental Market

What were the early signs that Mr Lee was talking about?

Property agents told The Sunday Times that competition in the private and public property sectors is less relentless compared to 2022. 

Once again, we have COVID-19 to blame for the spike in demand for rental flats in the past few years.

Construction delays accompanied by international students, foreign talent and Singaporeans looking for a home caused the market to become ruthless.

According to The Straits Times, rental growth has slowed, as seen from data in January 2023.

Property analysts noted that rental growth should slow towards the second half of 2023 and continue into 2024.

This is mainly because of inflation and the rising cost of living affecting the ability of tenants to afford high rents, resulting in more tenants opting to share units or move into farther but more affordable places.

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Recent BTO Controversies

BTO flats have seen their fair share of controversies since the initiative’s inception.

Earlier in January 2023, reports of mould in relatively new BTO projects like Sumang Lane at Punggol West and Anchorvale Parkview in Sengkang raised some eyebrows.

Notably, the external walls of all new HDB flats are painted with one coat of water-based sealer and two coats of algae-resistant paint.

More recently, on 19 March, residents living at the Senja Ridges BTO project in Bukit Panjang experienced a water supply disruption.

A previous water outage occurred during Chinese New Year at the same block.

Holland Bukit Panjang Town Council (HBPTC) has since conducted checks.

The external pipes throughout the block have also been flushed.