Are cooling measures working? How HDB resale prices have changed in every Singapore town

Are cooling measures working? How HDB resale prices have changed in every Singapore town


The government said in April that the property cooling measures in 2021 and 2022 have had a “moderating effect”. 

Analysing sales volume and prices in the two quarters before and after cooling measures were imposed, Prof Qian found that HDB quarterly resale transactions fell by 6.3 per cent after the cooling measures in 2021, but prices rose by 2.6 per cent over the same period.

After cooling measures in September 2022, the average quarterly resale volume of HDB flats fell by 3.6 per cent, but prices rose by 1.6 per cent. 

Prof Qian said those two rounds of cooling measures in December 2021 and September 2022 have reduced market transaction volume and slowed the growth of prices in the private and HDB resale market, although price levels continue to rise.

Analysts also pointed out that there were other factors affecting the HDB resale market, including the rise in loan interest rates and increasing supply.

During the COVID-19 pandemic, interest rates stayed low. Floating interest rates – most of which are pegged to the Singapore Overnight Rate Average – mostly stayed below 1 per cent.

But as the economy reopened, interest rates shot up, with floating rates in recent months above 4 per cent.

Construction delays during the COVID-19 pandemic also saw more people turning from Build-to-Order (BTO) flats to resale flats, pushing up demand.

Prices may start to moderate as supply catches up. The government is “committed to launch” about 23,000 BTO flats in 2023.

Analysts also pointed to an increase in CPF Housing Grant amounts for eligible resale flat buyers as potentially pushing up demand. Ms Christine Sun of OrangeTee & Tie called this a “confounding factor”.

The increase in housing grants for first-timers may have spurred demand and price growth for some types of flats, said Ms Sun, the senior vice president of research and analytics.

“Such a policy change done within six months of property curb may mask the true effectiveness of the cooling measures,” she added.