New measures to improve stability in housing market

Tynn Tan13 Sep 2019

With about 75 percent of Singapore households expected to qualify for the enhanced housing grants, analysts believe the new measures not only met the Ministry of National Development’s (MND) goal of raising affordability for new households to buy HDB flats, it may also lead to increased stability for the housing market.

DBS analysts Derek and Rachel Tan said the changes could result to a gradual bottoming and increased stability within the HDB resale market.

In Q2 2019, the property price index for the HDB resale market fell 0.2 percent quarter-on-quarter versus the 0.4 percent increase registered for properties outside central region (OCR).

“Over time, these new changes should arrest the decline in HDB resale prices as transactions pick up over time,” they said.

Krishna Guha of Jefferies Equity Research noted that the measures are aimed at easing some pressures from the HDB resale market, reported Singapore Business Review.

“We believe the measures are more targeted towards supporting the HDB resale market, which has seen some pressure lately. This is due to higher supply and the government’s clarification that only a small proportion of flats are suitable for redevelopment, and the remainder are to be surrendered upon lease expiry.”

But while it may help stabilise resale prices, the new measures may pull down activity within the private property market.

“The measures are slightly negative for the private property market, as some first-time buyers may shift their attention to public housing post changes,” said Vitay Natarajan of the RHB bank.

However, Natarajan does not expect the shift in demand to be significant – at less than five percent.

But while it may shift volumes away from the private property market, Guha expects private developers to benefit from the increased income cap for ECs.

“In 2015, EC volumes almost doubled after the income ceiling was raised for EC from $12,000 to $14,000. Whilst 50 percent was sold, we expect a boost from the new measures,” said Guha.


Tynn Tan edited this story on behalf of Victor Kang, Digital Content Specialist at PropertyGuru. To contact him about this or other stories, email


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