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Find out how HDB resale prices were affected after property cooling measures in 2013 and 2018

Find out how HDB resale prices were affected after property cooling measures in 2013 and 2018

HDB flats in Singapore. (Photo: CNA/Calvin Oh)

SINGAPORE: Singapore implemented new property cooling measures on Wednesday (Dec 15) to slow down increasing home prices in the private residential and Housing Board (HDB) resale markets.

This is not the first time the Government has stepped in with property curbs.

The latest measures include raising Additional Buyer’s Stamp Duty (ABSD) rates, tightening the Total Debt Servicing Ratio (TDSR) and lowering the Loan-to-Value (LTV) limit for HDB loans.

Prices of HDB resale flats hit their highest levels in the third quarter of 2021, with the HDB resale price index (RPI) hitting 150.6. That is higher than the previous peak in the second quarter of 2013.

The RPI provides information on the general price movements in the resale public housing market. 

It is not yet known how the latest measures will affect property prices, with analysts calling the new rules "tough" and "harder hitting".

An analysis of HDB data after similar cooling measures in 2013 and 2018 showed mixed results. In 2013, resale prices of HDB flats fell sharply, but less so in 2018 and for a less sustained period.

Resale Price Index of HDB flats after the 2013 and 2018 cooling measures. (Source: HDB)

HOW PRICES CHANGED IN EACH TOWN AFTER 2013

On Jan 12, 2013, an ABSD was introduced for Singaporeans who wished to buy a second property.

At 7 per cent, it was the first time Singaporeans had to pay ABSD on a second home. The ABSD rate for a third property onwards was increased and LTV limits were tightened.

The measures did not target just the private property market.

Before the announcement in 2013, the RPI had risen for 15 consecutive quarters – nearly four years of increase.

The cooling measures did not affect prices immediately. Shortly after the announcement, prices remained high, with median resale prices of four-room flats increasing in most towns.

But they then started to come down as a whole. The RPI fell in the third quarter of 2013, and continued falling for nine consecutive quarters after.

Comparing median resale prices of four-room HDB flats in the fourth quarter of 2015 - three years after the 2013 cooling measures - and the fourth quarter of 2012 just before the cooling measures, only Bishan and Geylang saw small upticks in prices of between 1 per cent and 3 per cent.

The largest falls were in Choa Chu Kang, Punggol and Sembawang, where the median price tumbled about 18 per cent.

Four-room flats in mature estates were more resilient to the cooling measures, with prices dropping by less than 10 per cent in most places, bar Serangoon and Tampines. In those two towns, resale prices of such flats fell by about 12 per cent.

Median prices of four-room HDB flats in each town after 2013

This is how median prices of four-room HDB flats were affected in each town about three years after the cooling measures in the first quarter of 2013.

Town 4Q 2012 1Q 2013 4Q 2015
Ang Mo Kio $489,000 $495,000 $464,000
Bedok $445,000 $455,000 $415,000
Bishan $527,500 $532,500 $535,000
Bukit Batok $448,500 $448,000 $402,000
Bukit Merah $660,000 $675,000 $640,000
Bukit Panjang $418,000 $423,000 $350,000
Bukit Timah - - -
Central - - $835,000
Choa Chu Kang $432,400 $436,900 $353,000
Clementi $550,000 - $535,000
Geylang $485,000 $501,000 $500,000
Hougang $454,000 $446,000 $398,000
Jurong East $453,000 $455,000 $416,000
Jurong West $430,000 $432,000 $380,000
Kallang/Whampoa $561,000 $530,000 $546,000
Marine Parade - - -
Pasir Ris $455,000 $459,000 $397,000
Punggol $515,000 $518,000 $420,000
Queenstown $710,000 $679,000 $699,000
Sembawang $438,000 $446,000 $360,000
Sengkang $468,000 $486,000 $402,900
Serangoon $487,500 $471,500 $428,000
Tampines $475,000 $481,200 $420,000
Toa Payoh $556,400 $592,000 $530,000
Woodlands $415,000 $420,000 $365,000
Yishun $414,000 $411,000 $354,000

Figures are rounded to the nearest hundred Singapore dollars.

(Source: HDB)

2018 COOLING MEASURES

In July 2018, ABSD rates were raised again. Singaporeans had to pay ABSD of 12 per cent for second properties, up from 7 per cent.

LTV limits were also tightened by 5 percentage points, which meant people could only borrow up to 75 per cent of the house’s value in most cases.

The effect on HDB resale prices was less pronounced than after 2013’s cooling measures, partially because home prices were already falling before the 2018 announcement.

The RPI fell for only four consecutive quarters from the third quarter of 2018, in contrast to the nine consecutive quarters after 2013's cooling measures.

Median prices of four-room HDB resale flats in non-mature estates fell nearly immediately after the 2018 cooling measures were announced. But they then started to rise again towards peak prices.

Comparing median resale prices of four-room HDB flats in the second quarter of 2021 - three years after the 2018 cooling measures - and the second quarter of 2018 before the cooling measures, nearly all towns saw prices rise.

Only Ang Mo Kio and Bishan saw dips in prices. Non-mature estates such as Yishun and Woodlands saw huge jumps in HDB resale prices, a sharp contrast to the situation after 2013.

In the three years after the announcement of the 2018 cooling measures, the median resale price of a four-room flat in Yishun and Queenstown rose by 25 per cent, followed by Woodlands with 23 per cent and Bukit Panjang with 22 per cent.

The cooling measures in 2018 had less of an impact on HDB resale prices than the 2013 cooling measures.

Median prices of four-room HDB flats in each town after 2018

This is how median prices of four-room HDB flats were affected in each town about three years after the cooling measures in the third quarter of 2018.

Town Q2 2018 Q3 2018 Q2 2021
Ang Mo Kio $460,000 $440,000 $438,000
Bedok $408,000 $405,000 $430,000
Bishan $580,000 $558,000 $545,000
Bukit Batok $380,000 $378,400 $417,500
Bukit Merah $662,500 $660,000 $760,000
Bukit Panjang $368,000 $368,000 $450,000
Bukit Timah * * *
Central $870,000 * $941,000
Choa Chu Kang $330,000 $338,500 $460,000
Clementi $557,500 $504,000 $695,000
Geylang $480,000 $472,500 $565,000
Hougang $372,000 $380,000 $435,500
Jurong East $407,500 $429,000 $429,000
Jurong West $365,000 $350,000 $418,000
Kallang/Whampoa $600,000 $500,000 $685,000
Marine Parade * * *
Pasir Ris $405,900 $405,000 $459,000
Punggol $441,500 $450,000 $488,000
Queenstown $738,000 $715,000 $800,000
Sembawang $334,900 $336,500 $410,000
Sengkang $410,000 $410,000 $465,000
Serangoon $410,000 $470,000 $465,000
Tampines $431,000 $425,000 $466,000
Toa Payoh $580,000 $615,000 $655,000
Woodlands $330,000 $328,000 $406,000
Yishun $340,000 $350,000 $426,500

* refers to cases where there are fewer than 20 resale transactions in the quarter for a particular town. The median prices are not published by HDB as they may not be representative. 

Figures are rounded to the nearest hundred Singapore dollars.

(Source: HDB)

Source: CNA/mi(gr)

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