Propnex Budget Wishlist 2024: Recommendations To Help Aspiringupgraders

12 January 2024, Singapore –Various rounds of property cooling measures have brought about more stability in the Singapore residential property market, as prices grew at a more moderate pace and sales volumes tapered. In 2023, private homes prices climbed by 6.7% while HDB resale flat prices rose by 4.8% – substantially slower from the 8.6% and 10.4% growth, respectively in the previous year, as per flash estimates. In 2021, overall private home prices jumped by 10.6%, while HDB resale prices posted an 11-year high growth of 12.7%.

Home sales also appeared to have waned somewhat as transactions moderated to an estimated 6,451 units of new private homes (ex. EC) in 2023 – down from 7,099 new units sold in 2022. This would be the lowest annual new private home sales in 15 years, since 4,264 units (ex. EC) were sold in 2008. Meanwhile, private resale volume also declined from 14,026 units in 2022 to an estimated 11,017 units in 2023. Over in the HDB resale market, there were 26,628 resale flats sold in 2023 (till 28 Dec) compared with 27,896 units in 2022, and 31,017 units in 2021.

Ismail Gafoor, CEO of PropNex, said, “Both the private residential and HDB resale markets have had a good run of performance, particularly in 2021 and 2022. The stronger price increase and rising interest rates sparked three rounds of cooling measures since December 2021, as the government sought to rein in price growth and to ensure buyers are prudent when buying residential properties. On the supply side, we saw an increase in the residential land supply via the government land sales programme, and the HDB has also ramped up its build-to-order (BTO) flat supply.

“The demand side curbs and supply side top-ups, along with global geopolitical tensions and slower economic outlook have collectively tamed the housing market in 2023. We believe there is scope for the government to consider reviewing some of its policies in 2024 so as to better help Singapore households attain their housing aspirations,” MrGafoor added.

PropNex’s Recommendations

1.    Review the 15-month wait-out period now that the HDB resale market has cooled

The 15-month wait-out period was introduced in September 2022 (in Q3 2022) as part of a package of cooling measures. It requires former private home owners who have sold their private residential property to wait for 15 months before they could buy an unsubsidised resale HDB flat from the open market (with exceptions for seniors who intend to purchase 4-room or smaller resale flats).  The government has indicated that this is a temporary measure.

With HDB resale flat prices growing at a much slower pace and transaction volume moderating in 2023, the government may consider reviewing the 15-month wait-out rule. It could perhaps assess if the measure is still necessary, particularly since the residential collective sale market has been more downbeat in the past year with few successful sales. Previously, it is possible that some of the en bloc beneficiaries – who have sold their private homes – had turned to the HDB resale market to purchase larger flats and in turn, contributed to the overall price growth, as these buyers were more willing to pay higher prices for their desired resale flats.

Chart 1: HDB flat resale volume comparison by Flat Type (2-room flats to Executive* flats)

         Source: PropNex Research, HDB,, (*executive flats include multi-gen flats), (Q4 2023’s figures based on transaction data)

Based on observations, former private home owners tend to prefer larger 5-room or executive flat types when they purchase an HDB resale flat as their replacement home. Notably, these two flat types saw a more significant drop in transaction volume from Q3 2022 to Q4 2022, after the implementation of the 15-month wait-out period in September 2022 (see Chart 1) – transactions for 5-room resale flats fell by 19% QOQ to 1,545 units, while the number of executive flats sold declined by 22% QOQ to 430 units in Q4 2022.

In addition, private home owners who have sold their residential property could have rented HDB flats as their interim accommodation until they serve out the 15-month wait-out period. This could also have inadvertently driven up the leasing demand and rentals for HDB flats. The number of HDB rental approvals – which had declined for three straight quarters from Q1 to Q3 2022 – rose by about 3.5% QOQ to 8,476 transactions in Q4 2022, and the figure has been rising gradually up till Q3 2023 (see Chart 2).

Chart 2: HDB flat rental approvals by quarter

      Source: PropNex Research, HDB, (Q4 2023’s figure based on transaction data)

2.    Consider same ABSD stamp duty treatment for HDB upgraders buying private homes with that of new Executive Condo buyers.

Currently, married couples who upgrade from an HDB flat to a private home will have to pay the additional buyer’s stamp duty (ABSD) upfront, within 14 days of signing the Sales and Purchase Agreement. They can apply for an ABSD remission if they sell their HDB flat within six months after the date of purchase or temporary occupation permit (TOP) or certificate of statutory completion (CSC), whichever is applicable.

This upfront ABSD payment is a hurdle for many families who wish to upgrade from their HDB flat to a private home, and it has now become even more onerous with the tightening of the ABSD measure in April 2023 – which saw the ABSD rate for Singapore Citizens buying a second residential property rise from 17% to 20%. This represents a sizable upfront ABSD payment and it leaves many households with little option but to sell their HDB flat first before purchasing a private home, so as to avoid the hefty payment. These households could incur unnecessary rental expense when they lease a home temporarily while waiting for their new home to be ready, and it may also be disruptive to their daily lives. This may also push up the demand for HDB flats on the leasing market.

Once again, PropNex urged the government to consider aligning the ABSD treatment for flat owners wishing to upgrade to a private home, with that of those looking to purchase new ECs from developers. Presently, HDB upgraders buying new ECs do not need to fork out the large ABSD payment upfront, they could live in their existing flat and are required to sell their flat six months after their new EC receives TOP.

By aligning the ABSD treatment, it would help to facilitate the aspirations of HDB owners who wish to make the switch to private housing, particularly families whose monthly household income has exceeded the $16,000 cap for new EC purchase, and have to turn to the private residential market for options. Perhaps the government can make such buyers undertake a mandatory requirement to sell their HDB flat within six months from taking possession of their private home, and failure to do so would result in the ABSD payment then, plus a penalty fee for not adhering to the requirement.

Furthermore, the stock of new ECs on the market is also relatively limited, and 70% of new EC units are set aside for first-timer buyers during the initial project launch – with fewer options left for upgraders.

3.    Place more Executive Condos (EC) sites on the Confirmed List under the Government Land Sales (GLS) programme to cater to strong demand

The government has placed one EC site in Jalan Loyang Besar on the Confirmed List of the 1H 2024 GLS programme – in keeping with a similar trend in past half-yearly GLS programmes. With the strong demand for new ECs among home buyers, developers have been bidding more aggressively for EC GLS plots in recent years. In GLS tenders that have closed in 2023, EC plots garnered an average of nine bids each, compared with just over three bids each on average for the private residential sites.

In particular, EC land rates have climbed through the years (see Chart 3). In 2018, the Sumang Walk EC site set a new record land rate at $583 psf per plot ratio, this record has since been smashed as EC land rates continued to rise. The latest record land rate stands at $721 psf ppr for the EC plot in Tampines St. 62 (Parcel B). Meanwhile, prices of new EC units have hit a fresh benchmark, with the average transacted unit price crossing $1,470 psf at Altura EC in Bukit Batok in 2023.

Chart 3: GLS EC land rates ($PSF PPR)

Source: PropNex Research, HDB (based on site award date)

By offering one or two more EC sites on each half-yearly GLS programme, it could help to give some assurance to developers that there are ample EC land supply and this may in turn, moderate the bid prices for such sites in public land tenders.

In addition, as new ECs are more affordably priced compared with new private condos, having a larger supply of new ECs will also be a boon for home buyers and HDB upgraders. Based on URA Realis caveat data for 2023, the average transacted unit price gap between non-landed new private home sales in the Outside Central Region (OCR) ($2,145 psf) and new EC sales ($1,406 psf) was about 53%.


PropNex believes that the recommended changes could help many Singaporean households to work towards upgrading to a private home, without being burdened by the substantial upfront ABSD payment. Furthermore, with more new launches expected in 2024, some HDB flat owners may be keen to explore possible upgrading options, and the alignment of ABSD treatment as outlined by PropNex above will be helpful.

Meanwhile, the loosening or scrapping of the 15-month wait-out period will facilitate the right-sizing of homes among private home owners. Some of the private home owners may wish sell their private property and purchase a resale flat to unlock gains from their private home to fund their children’s education abroad, or support their own retirement needs.

Finally, the injection of more EC sites to the GLS Confirmed List could help to ease the strong competition among developers for such plots and may bring about more measured land bids. This, in turn could help to stabilise the selling prices of new ECs, as well as to help Singapore households achieve their aspirations of living and owning a private home.

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