News
RESIDENTIAL PROPERTY | Staff Reporter, Singapore
view(s)

Homebuyers turn to HDB rentals as home prices shoot up following cooling measures

Displaced en bloc owners could turn to spacier flats whilst waiting for a replacement home.

Whilst the Singapore government’s surprise move to implement cooling measures on the property market is a bane to some developers, home loan providers, and en bloc sale aspirants, the HDB market could benefit from the curbs in the near-term, some analysts have said.

Larger HDB units may continue to see some demand from displaced en bloc owners who are looking for spacious, affordable accommodation whilst they wait for a replacement home, said OrangeTee & Tie head of research & consultancy Christine Sun.

However, the HDB rental market continued to show weakness in terms of demand and prices, “The current cooling measures is unlikely to have a major impact on the HDB rental market,” said Sun.

According to a previous report, about 1,735 HDB flats were rented in June, which is 5.8% down from 1,841 units in May. Rents are generally down for all HDB flat types except for HDB 5 rooms, which were up 0.1%.

“Some may lease slightly longer since the replacement cost of buying a new home is now higher under the new cooling measures, especially for those who own multiple properties,” Sun added.

Meanwhile, Withers KhattarWong partner Kenneth Szeto concurred with Sun and said, “Buyers looking at entry-level private properties may potentially consider HDB properties instead, as the latter are not affected by the latest cooling measures and loan restrictions.”

Szeto noted that the revised housing loan limits mean that even first time buyers will need to place an additional 5% cash down payment on their home purchases, an amount which is not insignificant.

“This is expected to rein in buyers' demand for both new launch properties as well as resale properties, just as the asking prices in the market are starting to gather momentum after four consecutive years of flat-lining or decline,” he added. 

Do you know more about this story? Contact us anonymously through this link.

Click here to learn about advertising, content sponsorship, events & rountables, custom media solutions, whitepaper writing, sales leads or eDM opportunities with us.

To get a media kit and information on advertising or sponsoring click here.