IMPACT OF HOUSING POLICIES ON THE HDB RESALE MARKET

Abstract

Over the past decade, numerous housing policies have been implemented in both the private and public housing markets in Singapore. The Housing and Development Board (HDB) resale flat market in particular has been directly or indirectly affected by many of these policies. This study aims to analyse the developments of the HDB resale market and examines the impact of the housing policies on the resale market. The study concluded that the housing policies that has the most significant impact on the resale flat market were those that were implemented in 1993, 1995, 1997, and 1999 respectively. The financing policy which was relaxed in 1993 to increase the affordability of public housing boosted both the resale volume and prices of the resale flats. The subsequent tightening of the policy in 1997 has also effectively reduced the speculative activities in the resale market. The Central Provident Fund (CPF) housing grant scheme though initially implemented with little success, has upon the review in 1995 effectively persuaded first-timer families to consider resale flats as a viable housing alternatives. However, due to the drop in resale flat prices between 1997 and 1999, nearly 80 percent of the first-timer families applied for resale flats in view of the lowered prices and the grant available. This brought about the reduction of the grant quantum in 1999 to shift the first-timers' demand back to the new flats queue so as to maintain a healthy balance between demand for the new flats and the resale flats. It can thus be seen that the HDB resale market has gone through several transitions arising from the impacts of the housing policies implemented throughout the years.