A year or two ago, the property market was at its peak and now, it seems to be have taken the quick dash down. With the fervent entry of new HDB flats and private properties over the last 3 years, the market is now facing a possible glut. The continuous implementation of property cooling measures also accounted for much of the decrease in activity over the last 2 quarters.
Data from the Urban Redevelopment Authority seems to signify a peak in home supply in 2016. That is when most of the properties purchased in the past 2 years will be completed and ready for occupation. That might mean many will be compelled to sell their existing homes and the resale HDB flat market may then face yet another challenge then. By 2016, 33,290 homes are expected to be completed.
In the resale HDB market, transactions have been at an all-time low since 2005. Prices fell by 0.6 per cent, and sellers may find themselves at the mercy of market demand. Median COV prices are now $10,000 and below. No longer are the days when sellers could command exorbitant cash premiums, which have to be paid upfront.
Most buyers in the resale HDB flat market now are upgraders or PRs. But the pool of buyers may have diminished as buyers may be restricted by loan limits and reduced number of foreigners granted permanent residency. PRs are now only allowed to purchase HDB flats after a 3-year period. Property analysts are expecting interest to rise again after the first half of the year, as low prices bring the buyers back.