Singapore is enhancing its public housing system to be more inclusive and accessible, balancing homebuyers' aspirations with broader community goals. Last year, the market saw the largest influx of new supply since 2017, with the completion of 21,400 Housing and Development Board (HDB) flats and an additional 20,400 units from private developers. State land tenders, or Government Land Sales (GLS), are expected to yield 9,250 residential units, setting a decade-high record for the land-scarce island nation.
For property seekers and sellers, this means a steady supply of new homes in the coming years, which should help reduce fluctuations, such as those seen in the rental market between mid-2021 and late 2023. During the pandemic, construction delays affected HDB's highly desired Build-To-Order (BTO) offerings, driving many property seekers to the HDB resale marketplace. This demand continues, partly driven by private homeowners looking to downgrade to public flats.
In Q1 2024, around 185 resale flats were sold for at least SGD 1 million, breaking the previous quarter's record, according to flash estimates from the board. Larger HDB flats are seen as a value proposition compared to similarly sized private homes, which are priced substantially higher. This trend indicates that buyers prioritise value and affordability amidst economic uncertainties. In the suburban Outside Central Region (OCR), 1,275 new private homes were sold in Q1, marking the highest quarterly sales in the neighbourhood since 2021, according to real estate agency OrangeTee.
Although the pace of private residential market sales has slowed from the peak in 2021 and 2022, homebuyers are still finding value opportunities and acquiring suitable properties for owner-occupation, according to Leonard Tay, head of research at real estate advisor Knight Frank Singapore. Prices of private condominiums and apartments rose by one per cent in the first quarter, down from a 2.3 per cent increase in Q4 2023, according to flash estimates by the Urban Redevelopment Authority (URA). Prices of landed properties slowed from a 4.6 per cent increase to 3.4 per cent. Without tighter monetary policies, private home prices could still grow by around three to six per cent this year, with HDB resale prices rising by up to five per cent, predicts OrangeTee. The US
Federal Reserve, which influences Singapore's interest rates, announced in January that rates would hold steady at a range of 5.25 to 5.5 per cent. Demand for HDB resale homes also comes from first-time buyers unwilling to wait for BTO sales launches, which now occur three times a year instead of four. This may change with the upcoming launch of 19,600 BTO flats this year and a significant shift in public housing policy. Starting in H2 2024, BTO projects will be classified into Standard, Plus, and Prime tiers. The Standard tier will be the most affordable and widespread, while the Prime tier will offer the best locations.
The new framework aims to maintain a good social mix in every town and region, according to the prime minister. The new framework is also expected to benefit singles, an often-overlooked segment of Singaporean society. The changes will allow singles to buy two-room flexi flats in all types of BTO projects, whereas they were previously restricted from buying flats in mature estates. This move is part of Singapore's broader efforts to make its public housing system more inclusive and accessible, ensuring that all segments of society can find suitable and affordable housing options.
