Mr Nicholas Mak, head of research and consultancy at ERA Realty Network, said that the new rule will force BTO applicants to think carefully before they apply, and may boost demand for resale flats.
“When this new rule comes into effect from August 2023 onwards, the number of BTO applications may temporarily decrease as only the more serious BTO flat buyers will apply,” he said.
Applicants, especially second-timers, who had one non-selection count may turn to the HDB resale market, he added. But this increased demand may not last, said Dr Tan Tee Khoon, Singapore country manager at PropertyGuru.
“The market will likely recalibrate and stabilise by next year after some volatility as home seekers grow accustomed to the new regulations,” said Dr Tan.
WHO MAY DROP OUT?
Ms Christine Sun, senior vice president of research and analytics at OrangeTee & Tie, said that many buyers who do not have urgent housing needs will likely hold back their applications.
“The applicants who may drop out include those who have applied many times as they were targeting popular mature estates or certain flat types, which are deemed to yield better investment returns,” said Ms Sun.
“Others could be undergraduates or courting couples who may not be ready to get married but have applied to secure units earlier.”
In 2018, HDB allowed younger couples aged at least 21 years old to defer the assessment of their income and apply for flats early, so more undergraduates and national servicemen may have joined the queue, she said, adding that some could have withdrawn their applications when the relationship soured.
“Now many may hold back their applications until they are committed to the relationship and are ready to settle down,” she said.
Other housing policy changes were announced at the Budget 2023 speech on Feb 14 and the Committee of Supply debate for the Ministry of National Development on Thursday.
A new First-Timer (Parents & Married Couples) or FT(PMC) priority category has been created. Applicants in this category – first-timers who have children and married couples aged 40 and below – get three ballot chances instead of two.
Eligible first-timers buying resale flats will also get a boost in the CPF Housing Grant amount of up to S$30,000.