“Do you have a house already? It’s so expensive now, can you afford a 4-room near your parents?” 
 These are questions I’m expecting relatives to ask this  Chinese New Year . 
 Source: Giphy 
 As harmless as it seems, it’s a question a lot of people are asking themselves too. 
 It’s no doubt that one of 2022’s highlights was the unrelenting rise in  property prices . 
 We witnessed how the  interest rates  affected our  bank loans ,  fixed deposits , and  savings accounts  are affected. 
 Even with new HDB projects coming up this year to meet the demand for new houses, these launches also hit a new high in price. 
 Just in  Aug 2022 , five-room flats or larger at Central Weave @ AMK started at more than $700,000 and some topped at $842,000. 
 The concern remains –  can you afford an HDB flat this year? 
 Here’s what you need to know! 
 
 TL;DR: Singapore Property Prices in 2023 
 
 Click here to jump: 
 
 Singapore property prices over the last 10 years 
 Government property cooling measures 
 Will property prices drop in 2023? 
 Are Singapore properties affordable? 
 
 
 Singapore Property Price Trend: Last 10 Years 
 Property prices have not always been this high before, but they shot up during COVID due to pent-up demand, which pushed up prices of resale flats. 
 There are speculations on whether prices will start going down because there could be a recession, and typically, property prices tend to tank when there is one (1996 & 2008 specifically). 
 To see this we will need to look at the  Private Residential Property Price Index  provided by the Urban Redevelopment Authority (URA), which tracks the overall price movement of the private residential market. 
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 Source: URA | Private Residential Property Price Index 
 Note: This index is based on the price indices of private properties, offices, shops, multiple-user factories, and warehouses. 
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 Singapore Property Cooling Measures 
 Singapore has seen HDB resale prices rise for 10 consecutive quarters, with the Government implementing cooling measures to try and moderate demand. 
 These were the years when cooling measures were put in place: 
 
 15 May 1996: Taxing gains from property sales 
 14 Sep 2009: Two schemes that (1) allowed buyers to only make a 20% downpayment and defer further payments, and (2) require buyers to only repay the principal housing loan after a specified period that’s usually when the unit is completed, were scrapped 
 20 Feb 2010: Loan-to-Value (LTV) limit was lowered from 90% to 80% and Seller’s stamp duty reinstated 
 30 Aug 2010: Minimum cash downpayment raised to 10% and LTV lowered to 70% and Seller’s stamp duty period expanded from one to three years 
 14 Jan 2011: Changes to Seller’s stamp duty and LTV limits 
 8 Dec 2011: Introduction of Additional Buyer’s Stamp Duty (ABSD) 
 6 Oct 2012: LTV ratios were reduced for loans exceeding 30-year tenures and a new limit of 35 years was applicable to loans for all residential property 
 12 Jan 2012: ABSD raised and LTV tightened 
 29 Jun 2013: Total Debt Servicing Ratio (TDSR) was introduced to limit how much an individual can borrow to buy property 
 6 Jul 2018: ABSD raised and LTV tightened 
 16 Dec 2021: The floor rates in calculating the Total Debt Servicing Ratio (TDSR) tightened from 60% to 55%, and the LTV ratio was tightened from 90% to 85% 
 30 Sep 2022: 15-month wait-out period for private property owners and ex-private property owners on buying non-subsidised HDB resale flats, curbing the demand where. 
 
 If you look at the HDB Resale Price Index, prices did crash after the Asian financial crisis in 1997 and rebounded during the global financial crisis of 2008. 
   
 Source: URA | HDB Residential Property Price Index 
 Note: The index tracks the overall price movement of the public residential market and is based on the quarterly average resale price by the date of registration) of HDB resale prices. 
 When we look closely, over the last 20 years (with the exception of 2009 – 2012), when a cooling measure was put in place, prices started dipping after 6 to 12 months. 
 And indeed, according to  PropertyGuru , HDB resale prices did rise slower at 8.4% and 10.3% year-on-year in Q4 2022. 
 Before the cooling measures were put in place in Sep 2022, private property owners could weigh on the resale supply if they want to ‘right sized’ their homes by choosing a larger HDB resale, or a smaller private unit. 
 Pent-up Demand & Undersupply of Private Properties 
 While property prices remain sky-high across all markets, there’s still demand for private properties due to pent-up demand and a lack of available projects on the market. 
 Source: URA | URA Property Price Index Q4 2022 
 According to the URA Property Price Index, prices of private residential properties appreciated for 10 consecutive quarters, increasing by 3.8% quarter-on-quarter in the third quarter, and 13.6% year-on-year. 
 
 According to URA, there were around 15,677 uncompleted private residential units that had not yet been sold, a rise of nearly 10.7% from the low in Q4 2021. However, it remained 8.5% lower than in Q3 2021. 
 On the supply side, developers face a 35 per cent Additional Buy Stamp Duty (ABSD), and are subject to an additional non-remittable five per cent, regardless of the size of the project. This incentivises developers to build smaller instead of mega-projects, and can sometimes be marketed as exclusive or part of an integrated project. 
 Given these reasons, supply could be tightened. 
 Economics tells us that with low supply and high demand,  prices might not necessarily drop . 
 The important questions to ask will be: 
 
 When the 15-month wait-out period is over, would there be a spillover effect on resale supply and price again? 
 Even though sales volume slowed down in Q4 2022, would demand drop in 2023? 
 
 How to tell if there’s going to be demand? The first telltale sign is to look at the number of BTO applications. 
 
 
 
 
   2020 2021 2022 
 
 
 
 
 BTO Supply 16,800 17,109 23,000 
 
 
 BTO Applications received 87,800 23,077 117,251 (including Community Care Apartments) 
 
 
 

 Noticed that the number of applications is way higher than the supply yet? 
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 Will Property Prices Drop in 2023? 
 There’s no guarantee about what might happen this year. 
 However, based on what might be  holding up prices , it is likely that prices would  remain at their current level  at least for the first six months of 2023, or there could be a  slowdown in price increments . Home prices might not correct downwards unless there’s a recession. 
 Read more: 
 
 What’s Really Driving Up Singapore’s Property Prices? 
 Is the HDB Resale Flat Market Overheating? 
 HDB Valuation: How Do I Figure Out How Much An HDB Flat is Worth? 
 
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 Affordable Housing For All Singaporeans 
 Previously, we shed light on how HDB  determined the prices of BTO flats . 
 We’ve heard opposing arguments on the  affordability of public housing  in Singapore. 
 Despite what many seem to claim, BTOs are still affordable for the average Singaporean whereas resale flats are still affordable but may soon be out of reach should the resale market continue ballooning. 
 But the real question is: What exactly is “affordable”? 
 Both Millennials and Gen Z first jobbers are enduring many things at once – inflationary pressures, high housing interest rates, and borrowing costs. 
 Source: Giphy 
 But we need to remember that beyond economics, housing issues conflate a number of different political and social issues. 
 Without going too much into politics, let’s talk about social issues first. 
 Ask around and you’ll notice defining affordability is  very  difficult. 
 For some, it could mean being able to “upgrade” at some point. 
 And for others, it could mean they have a place comfortable to stay and they don’t experience financial difficulties paying their mortgage. 
 Aside from these factors, we haven’t talked about the number of dependents, if the household is dual or single income, and if you’re comfortable spending 30% of household income on a mortgage. 
 Resale Flats Being The Best Recourse For Most People 
 Source: Giphy 
 Waiting time is too long and there’s an urgent need for housing? 
 While  Open Booking  and  Sales of Balance  flats are options, you need 100% luck to be able to secure one that you like. 
 What’s the next best choice? 
 Resale flats. 
 For those who want to downgrade from a bigger condo to a smaller and more affordable flat? 
 Resale flats. 
 And for Permanent Residents who need to wait three years before they can buy a flat? 
 Resale flats. 
 We have to see for once that  not everyone can apply for BTOs  and have to subject themselves to (high)  Cash-Over-Valuation . 
 Public Housing Being Treated as Commodities 
 Source: Investment Stab 
 When it comes to public housing, many Singaporeans are also trying to “flip” BTOs instead of treating their homes as a place to live for the long term. 
 Once the 5-year Minimum Occupancy Period is up, they will sell their flat and apply again for another BTO. 
 Although there are no official statistics to prove this, I personally believe so when I look at the oversubscription rates for second-timers during BTO applications. 
 Let’s not forget that  million-dollar HDB flats   are a thing  because people decide to downgrade when they are older. 
 Supply for BTO Flats in Singapore 
 Due to the strong demand for public housing in recent years, HDB has been ramping up the production of BTO projects. 
 But therein lies a problem, in the name itself; “Build-To-Order”. 
 Source: Giphy 
 Yup, HDB flats are only built once there is sufficient demand. 
 This was a great idea when there was an oversupply of HDB flats in the 90s, but what happens when there is too much demand? 
 We are now playing a game of catch-up. 
 When it comes to supply, time is an integral factor. Along with  BTO delays  and the slowdown of supply chains, HDB BTO flat supplies are not keeping up with the current demand for housing. 
 Should we relook at the whole BTO system? 
 Read more: 
 
 What Type of HDB Flat Can I Really Afford? 
 Buying an HDB Resale Flat in 2022: How Much Do You Need To Be Earning? 
 
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 Afterthoughts 
 We are living in difficult times. 
 Would you be shifting your sights to the rental market because of affordability constraints? 
 Needless to say, for some people, buying a house seems like a faraway dream when renting is already a struggle. 
 Have more to share on this topic? Share your thoughts on  Seedly ! 
 
   
 Related Articles: 
 
 Upcoming HDB BTO Feb 2023 Preview: Kallang/Whampoa, Queenstown, Jurong West & Tengah BTOs 
 HDB BTO Application: A Step-by-Step Guide To Applying for Your First HDB BTO (May 2022 BTO Launch) 
 HDB Sale of Balance (SBF) Flat Nov 2022: A Step-By-Step Guide 
 The Seedly HDB Grant Guide: A Complete Guide to CPF Housing Grants for HDB BTO, HDB SBF, and Resale Flats 
 How To Increase Your HDB BTO Ballot Chances: Application Rate & Priority Schemes Matter More Than You Think 
 

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