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New HDB cooling measures may fail to curb price rises, expert warns

Amongst measures is the lowering of the LTV ratio for HDB loans to 75%.

The government’s latest measures to cool the HDB resale market will only slow demand for flats “temporarily,” said a real estate expert.

Lee Sze Teck, senior director for Data Analytics at Huttons, said the slowdown will result from buyers weighing the impact of the new measures but added that "demand will return and prices will continue to rise" over time.
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“In 2025, an estimated 7,000 flats will reach their MOP. This is even lower than 2024’s estimated 12,000 flats fulfilling the minimum occupation period (MOP). HDB resale prices may continue to rise in 2025,” said Lee.
“The changes may not achieve the intended cooling effect on the HDB resale market,” added Lee.

Lee said the measures will not affect the private residential, Build-to-Order (BTO) and executive condominium (EC) markets. 

“There is likely no impact on the 4-room and larger flats market, and these owners tend to make up the bulk of HDB upgraders,” Lee said.

Similar to the private market, Lee said the EC market will unlikely be impacted by the measure as “HDB upgraders do not need to sell their flat when they purchase a new EC.

Regarding the BTO market, Lee said: "As the purchase is on a deferred payment scheme, any shortfall is mitigated by the time buyers collect their keys to the BTO flat."

HDB million-dollar flats will also be unaffected by the measures, said Lee, adding that buyers of such use a bank loan and do not qualify for any grant.

“They also do not borrow up to 75% of the purchase price or valuation price. Some of them don’t even use a loan to buy,” Lee said.

Within the HDB resale market, Lee said the measures may even result in price gains for 2-room and 3-room resale flats. 

Lee does not foresee the measures impacting 4-room and larger flats, since most buyers of these units will not benefit from grant increases and usually finance their purchase with a bank loan.

Lee, however, said the limited supply of newly MOP 4-room and 5-room flats may lead to an increase in their prices.

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