Lower BTO flat supply may fuel more resale deals, analysts say

Potential BTO buyers might be deterred.

With HDB set to reduce its BTO flat supply from 17,891 in 2016 to about 17,000 next year, analysts reckon that this might spur more transactions in the resale market.

"Potential home buyers could feel that they may have a lower chance of a successful ballot because of the lower flat supply. Thus, some of them may turn to the resale market for their purchase, where prices have been quite stable this year, and the waiting time is much shorter," said Eugene Lim of ERA Realty.

Lim added that based on the responses at recent BTO sales launches, especially for those in mature estates, it would be plausible for HDB to begin construction before actually launching the flats for sale.

"Alternatively, they may also be considering using the shorter waiting time to make new towns like Tengah more attractive for those willing to be the first movers. For many new flat buyers, price and waiting time are major considerations that impact their buying decisions," he said.