Increased balloting for HDB BTO flats
Providing more ballot chances for those with urgent needs, like families with children and married couples below 40 years old, is a good move. The increased ballot chances may see more eligible buyers applying for BTO flats. It can also help lower to middle-income earners own a home faster, especially if they are cash-strapped and cannot afford a resale flat.
Increased resale grant
The increased subsidy will provide couples with additional financing to buy a resale flat. With the additional grant, some demand may be diverted to the resale market. Since more subsidies are given, we may expect more eligible buyers to buy at popular locations, such as mature estates. Others may buy slightly bigger flats with the additional grants (e.g. to purchase a small 4-room flat instead of 3-room flat). The move will help to ease the anxiety of young couples who need urgent housing.
Increase in BSD
The changes may have some knee-jerk effects. Buyers need time to reassess their finances and observe the market reaction. Based on URA data for 2022, 54.7 per cent of the total private residential transactions were at least S$1.5 million, while 15.4 per cent were at least $3 million. About 39.2 per cent were between S$1.5 million and less than S$3 million. Therefore, moving forward, about 50 per cent of transactions may be affected by the increased BSD if we use last year's data as an indication.
For new home sales, about 71.1 per cent of total transactions in 2022 were at least $1.5 million, while resale was about 46.8 per cent. Therefore, using last year's data as a proxy and with more than 50 per cent of this year's new launches in the RCR and CCR, we may expect the changes to affect the new sale market more than the resale market.
Nevertheless, properties in the upper tier may not see a major impact as wealthy buyers are not likely to be deterred by the additional BSD. Properties with good product attributes and location will continue to draw buying interest. Moreover, properties priced at S$3 million and above tend to have unique attributes or those above S$10 million tend to be rare products, which will continue to attract investor interest.