Property Blog

What new HDB rules mean for the property market

Singapore's property market may see an oversupply by 2013. (Yahoo! photo)Singapore's property market may see an oversupply by 2013. (Yahoo! photo)

By Dennis Ng

The news that the income ceiling to qualify for an HDB flat was being raised had been expected, but it will still have an impact on the property market.

Here's what may happen now that sellers and buyers may be more active as the Ghost month comes to a close:

1. Demand for DBSS (Design, Build and Sell Scheme) flats might drop. DBSS flats were previously for those whose income exceeded S$8,000 but are below S$10,000. There is no longer this sandwiched class in the new ruling.

People earning S$8,000 to S$10,000 can now either buy new HDB flats or resale HDB flats and be entitled to a Housing Grant.

2. Demand for 3-room resale HDB flats will go up. Many more singles will be given the housing grant to buy a resale flat and many of them are likely to rush out to buy 3-room resale HDB flats.

3. Some of the demand for mass-market condos, especially those priced between S$1,000 psf to S$1,300 psf will drop, as part of the demand will shift to ECs and HDB Resale Flats.

4. With more higher income families (those earning above S$8,000 to S$10,000) qualifying to get the grant for HDB Resale flats, this might push up demand for HDB Resale flats and there might be upward pressure on COVs (Cash Over Valuation).

My outlook for property prices

All in all, I do not see the possibility of Singapore property prices falling much in the next six to 12 months as we still have a tight supply situation within this period. Most of the 25,000 new HDB flats announced by Minister Khaw Boon Wan to be built in year 2011 would probably only be completed in year 2013 at the earliest.

Next year, Minister Khaw again promised to build another 25,000 new HDB flats. So I worry that there might be an over-supply of new HDB flats in year 2013 and year 2014, especially if it coincides with a slowdown in the Singapore economy. By 2013 we might be in the midst of a global financial crisis.

Year 2013 and year 2014 will also see over 30,000 units of new condos being completed, so there might be an over-supply situation in condos during the same time period as well.

Dennis Ng is director of Leverage Holding and Master Your Finance. This article is posted courtesy of, a Singapore property blog dedicated to helping you understand the real estate market and make better decisions. Get your free Property Beginner's and Buyer's Guide here.

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