Before the hike, private home prices in the first quarter of 2023 jumped 3.3 per cent, up sharply from 0.4 per cent in the last quarter of 2022. Prices also surged 11.4 per cent year on year, according to Urban Redevelopment Authority figures.
Why it matters:
The April cooling measures were aimed at preventing property prices from being pushed up by investors, and prioritising Singaporeans buying homes for owner-occupation.
Foreign buyers were hit the hardest, which led to fewer foreigners buying private properties in the months after the hike.
In January, foreign buyers accounted for 5 per cent of non-landed private resale home transactions, or 26 transactions. The proportion fell to 3.7 per cent in May, and by November it had slipped to 1.2 per cent, or nine transactions, according to real estate agency PropNex.
Property analysts said the aggressive ABSD hike for foreign buyers shows the Government wants to discourage speculative buying, especially those who buy a large number of units here.
3. Debate on housing affordability
In February, Parliament debated two motions on the affordability and accessibility of HDB flats for 12 hours over two days. One was filed by Progress Singapore Party Non-Constituency MP Leong Mun Wai, and the other by National Development Minister Desmond Lee.
Mr Leong proposed a housing scheme in which buyers would pay only the construction cost plus a notional location premium for their flats. They would pay the land cost, with accrued interest, only when they sell their flats in the resale market. His proposal drew criticism from political office-holders, who said it would erode the country’s reserves.
In response, Mr Lee outlined how the Government is tackling rising prices for new and resale HDB flats.
Parliament subsequently voted to pass Mr Lee’s motion, and rejected Mr Leong’s.
Why it matters:
The debate in Parliament came on the heels of concerns over the affordability of public housing. The Covid-19 pandemic had disrupted the supply of flats, and waiting times for new flats and resale prices went up.
The hot-button issue was robustly debated by the House, and Mr Lee gave a preview of policies that the Government would subsequently announce to address concerns.
In his Budget speech, Deputy Prime Minister and Finance Minister Lawrence Wong said housing grants for first-timer families and singles buying HDB resale flats would be increased.
During the debate on his ministry’s spending plans, Mr Lee announced a new First-Timer (Parents and Married Couples) priority category, which covers married couples aged 40 and below and those with Singaporean children aged 18 and below. More flats have been set aside for people in this group, who will also get one additional ballot chance in their flat applications.
First-timer applicants who do not select a BTO flat when invited to do so will be considered second-timers in subsequent flat applications for a year, Mr Lee added.