Have government cooling measures been effective?

The effectiveness of government cooling measures in the Singapore property market is a complex and multifaceted issue.

HDB Cooling Measures

• The 15-month wait-out period for private property owners purchasing non-subsidized HDB resale flats has been effective in reducing the number of private property downgraders buying HDB flats. This number dropped from 34% in the first nine months of 2022 to 12% in the first eleven months of 2024.
• However, despite these measures, HDB resale prices still increased by 9.7% in 2024, up from a 4.9% increase in 2023. The number of HDB million-dollar deals also rose significantly, indicating that these measures have not fully contained price growth.

Private Property Cooling Measures

• Multiple rounds of cooling measures have been introduced since 2009, but their effectiveness has been mixed. For instance, eight rounds of measures between 2009 and 2013 led to a 11.6% drop in private home prices from the third quarter of 2013 to the second quarter of 2017. However, subsequent measures have not always achieved the desired outcome of significantly lowering prices.
• Recent measures, such as the reduction in HDB loan-to-value (LTV) limits from 80% to 75% in August 2024, have had limited impact on mass-market condo prices. Private residential prices continue to rise, with average new launch prices increasing from $2,185 per square foot in January 2023 to $2,475 per square foot in January 2025.

Market Sentiment and Supply

• Cooling measures often lead to mixed reactions from buyers. Some rush to purchase before further restrictions, while others wait in anticipation of lower prices. However, this wait-and-see approach may not yield the expected results, as prices might not drop significantly even with cooling measures.
• The government's focus on increasing housing supply, such as the commitment to deliver 100,000 Build-to-Order (BTO) flats by 2025, is aimed at easing market pressures. However, the impact of these measures on stabilizing prices is still being monitored.

Overall Effectiveness

• Despite repeated cooling measures, the Singapore property market remains robust, with prices continuing to rise in both the HDB and private sectors. This suggests that while some measures may have temporary or specific effects, they have not fully addressed the underlying demand and price growth in the market.

In summary, while some cooling measures have shown specific successes, such as reducing the number of private property downgraders buying HDB flats, they have not been universally effective in controlling price growth across the entire property market. The government remains vigilant and is prepared to introduce new measures if necessary to maintain market stability.