As property resale prices continue their upward trajectory, Singapore’s Minister for National Development, Desmond Lee, has signaled that the government is open to implementing further cooling measures if necessary. However, he emphasized that existing policies must be given time to take effect before new measures are introduced.

Current Measures and Their Impact

Since December 2021, Singapore has introduced four rounds of cooling measures to curb property price inflation. The most recent measure, implemented in August 2024, reduced the loan-to-value (LTV) limit for Housing Board (HDB) flats from 80% to 75%. This move was aimed at tempering demand in the higher-end resale market, affecting roughly 10% of buyers.

Another significant regulation, the 15-month wait-out period for private property owners before purchasing non-subsidized HDB flats, was introduced on September 30, 2022. This policy successfully curtailed demand from wealthier buyers, as the proportion of private home owners purchasing million-dollar HDB flats dropped from 34% in early 2022 to about 12% by the end of 2024.

Despite calls from industry players to lift the wait-out period, Mr. Lee confirmed that it will remain in place until market conditions stabilize. In parallel, the government continues to increase housing supply to ease market pressures, with 100,000 Build-to-Order (BTO) flats set to be delivered between 2021 and 2025. Private housing supply is also being expanded, with 8,505 private homes to be released under the Government Land Sales programme in the first half of 2025.

Addressing Market Psychology and Affordability Concerns

Despite these interventions, HDB resale prices surged by 9.6% in 2024, nearly doubling the previous year's growth rate of 4.9%. Mr. Lee attributed this spike to temporary supply constraints, the appeal of centrally located properties, and a "sentiment-driven psychology" in the market. Reports of record-breaking million-dollar transactions have fueled expectations among both buyers and sellers, potentially exacerbating speculative behavior.

To counter affordability concerns, the government has introduced greater transparency through recent transaction data on the HDB portal and the HDB Flat Eligibility (HFE) letter, which helps buyers assess their financial capacity before purchasing a flat. Additionally, financial assistance for first-time and lower-income buyers has been strengthened. The Enhanced CPF Housing Grant, increased in August 2024, now provides up to S$120,000 for families and S$60,000 for singles purchasing their first HDB flat.

Striking a Delicate Balance

Mr. Lee acknowledged that while demand-side cooling measures are crucial, they must be balanced against broader economic conditions. High interest rates, trade uncertainties, and geopolitical challenges necessitate a cautious approach to avoid overcorrecting and triggering a sharp downturn in the property market.

"We are not averse to putting in new measures if necessary, because we need to ultimately make sure there's no property bubble, whether it's on the private side or the public housing side," he emphasized.

With Singapore's property market at a crossroads, the government remains vigilant in its efforts to balance housing affordability with economic stability, ensuring that homeownership remains accessible for future generations.