If demand does shift to the resale market, it will also address some of the demand and supply imbalances in the BTO market.
“When this happens, the lowered BTO demand, additional ballot chance and increased BTO supply may improve the chances of first-time buyers getting a BTO flat,” said Mr Lee.
Mr Gafoor also said the increase in grant amounts could further spur demand for resale flats, keeping their prices firm.
For first-timer singles with the option of purchasing either a larger HDB resale flat or a smaller, private non-landed unit, the additional CPF housing grant could also channel demand from the private residential market to the HDB resale market, said Ms Chia Siew Chuin, head of residential research at JLL Singapore.
Associate Professor Yu Shi Ming from the Department of Real Estate at NUS Business School summed it up thus: “While this announcement is certainly welcome by young families wanting to buy their first home, it may bring effects that are counter to the objectives of helping young families.”
He said increased government grants would give buyers a wider choice of resale flats and more capital to buy a larger or better-located flat. Sellers, on the other hand, would consider such financial assistance and increase their asking prices.
“As it is, we have seen the resale HDB prices setting new peaks,” he added.
“This latest announcement may lead to the continuing trend, despite the various cooling measures introduced recently.”