Expect 'moderation' in HDB resale flat prices when supply increases from next year: Chee Hong Tat
SINGAPORE: A "moderation" of resale flat prices is expected when more new flats meet their minimum occupation period (MOP) starting next year, Minister for National Development Chee Hong Tat said on Wednesday (May 28) in his first remarks to the media since taking his new portfolio.
After a visit to the Toa Payoh Ridge Build-to-Order (BTO) project, Mr Chee said his ministry is aware of the concerns Singaporeans have over the increase in resale flat prices.
"This is also an important area for my ministry and I. We want to see how we canhelp to address this concern. At the heart of it, it is actually a supply and demand issue," he added.
"I believe this situation will improve, and we will see a moderation of resale flat prices when more of the new flats that we have built in the last few years reach the five-year minimum occupation period starting from 2026.
"Once we see more supply coming in, and also coupled with more new BTO flats entering the market, I think we will see moderation in the resale flat prices in the years ahead."
The COVID-19 pandemic had "severely impacted supply" due to building delays, Mr Chee's predecessor Desmond Lee said in parliament earlier this year.
"At the same time, there was a broad-based increase in demand, driven by changing social norms. Application rates for BTO flats spiked and HDB resale prices rose sharply," said Mr Lee, who is now Minister for Education.
About 19,600 BTO flats will be launched in 2025. With this year's offering, the government is on track to launch about 102,300 BTO flats between 2021 and 2025, exceeding its earlier commitment of 100,000 units over the five-year period, Mr Lee said previously.
Last month, data from the Housing and Development Board (HDB) showed that HDB resale price growth eased to 1.6 per cent in the first quarter of 2025. This marked the slowest pace of growth since the fourth quarter of 2023 (1.1 per cent).
The resale price index reflects the general price movements in the resale market.
Resale transactions for the first quarter of 2025 rose by 2.6 per cent to 6,590, up from the 6,424 transactions in the previous quarter. Compared to the same period last year, first quarter transactions were 6.8 per cent lower.
On Wednesday, Mr Chee was asked about the impact of the number of flats reaching MOP, as well as a report on 141 million-dollar flats sold in April - an all-time high.
According to a February report from property firm OrangeTee, the number of flats obtaining their five-year MOP is projected to fall for a third consecutive year from 30,920 units in 2022 to 6,974 units in 2025. This is the lowest MOP number in 11 years, with the previous low occurring in 2014 with 5,301 units, said the report.
However, its analysts also said that a "big surge" in resale prices is "unlikely" since more BTO flats will be launched for sale.
Given these reports, Mr Chee was asked if the government sees the need to intervene in the housing market.
He said that the authorities will monitor the situation carefully, but also pointed to the easing of the resale price index.
"We feel that one of the ways to address this is to increase the supply, the supply of new BTO flats. But also to give the market some time to adjust to a higher supply of resale flats starting from 2026," he added.
Mr Chee said that the authorities previously introduced the 15-month wait-out period for private property owners before they can purchase a non-subsidised HDB flat.
Introduced on Sep 30, 2022, this rule has notably reduced the proportion of private property owners buying high-priced resale flats.
"This restriction was put in place as a temporary measure, precisely because there were concerns about higher resale flat prices. But this is not meant to be a permanent measure, so I hope that when the situation improves and the resale flat prices begin to moderate, we are able to consider reviewing or even removing this restriction," he said.
VERS
Asked if details on the Voluntary Early Redevelopment Scheme (VERS) will be announced during his tenure with the ministry, Mr Chee said that the authorities will share details at the "appropriate time".
"It's something that we will definitely study very carefully. It's an important topic that I know is close to the hearts of many Singaporeans, existing flat owners and also the industry," he said.
VERS was first mentioned by then-Prime Minister Lee Hsien Loong during his National Day Rally in 2018 as a way of dealing with expiring 99-year leases.
The plan is to offer the scheme in selected precincts when the flats are aged about 70 years or older. The government will compensate residents whose flats are taken back early and help them get another flat to live in.
Mr Chee said that revitalising older HDB estates and towns is an "important area" of focus for his ministry.
"It's important for us to look at - as our estates age, and our population ages - how do we continue to rejuvenate our towns so that they are good homes for residents of all ages," he added.
Mr Chee, who was formerly the transport minister, added that there were similarities between both portfolios. He was sworn in as Minister for National Development on May 23.
"They both require long-term planning, and they both require us to work closely with the tripartite partners of industry and also our sisters and brothers from the unions," he said.
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