Home buyers adopt wait-and-see approach after roll-out of property cooling measures

Michelle Ng
Housing Correspondent

15 January 2022

SINGAPORE - Home hunters are now on the prowl for cheaper buys after property cooling measures were rolled out by the authorities last month.

Take the case of car dealer Jerome Pang, who has sold his three-room Housing Board (HDB) flat in Clementi. He would have been keenly looking for a replacement home but is now adopting a wait-and-see approach.

"If there weren't any cooling measures, we probably would have bought a new unit as soon as we sold the Clementi flat because there's no point in dragging it out," said Mr Pang, 30, who runs a second-hand car business.

"But now, we're okay to wait for one to three months to see if HDB resale prices will come down. However, if prices don't move, or if we find a unit that we really like, we'll just buy because ultimately we need a home," he added.

He and his wife will stay in his parents' home while they search for a four-room HDB resale flat in Woodlands that fits their $500,000 budget.

Spikes in private and public home prices prompted the authorities to introduce a set of property cooling measures that kicked in on Dec 16.

They include raising the additional buyer's stamp duty for purchases of extra properties, tightening the total debt servicing ratio for borrowers and lowering the loan-to-value limits for HDB loans.

Flash estimates showed that HDB resale prices last month continued to rise, increasing by 0.8 per cent, albeit at a slower pace than November's 1.3 per cent.

Property analysts said it takes time for the market to react so the impact of the cooling measures will likely be reflected in prices and transaction volumes only from this month.

In the meantime, buyers who are not in a rush are holding back, with many hoping to secure a home at a lower price.

One who wished to be known only as Mr Leong has been on the lookout for a two- or three-bedroom condominium for $1.5 million since last November, and will continue to bide his time.

"Back in November, the asking price was way too high - it was clearly a few hundred thousand dollars over market valuation. Now I do see a little bit of price adjustment, but it's not significant enough for me to act," said the 47-year-old public servant, who does not own any property now.

"It's not yet clear if sellers are willing to adjust their price to something more reasonable, but I believe in taking the time to choose and shortlist something that's within budget so you don't overleverage," said Mr Leong, who is willing to wait up to a year.

Ms Irene Huang, who works in the education sector, was about to put in an offer to buy a two-bedroom condo in West Coast when news of the cooling measures came.

"The price was increasing really quickly, from $850,000 to $890,000 in just two months. So around mid-December, I thought I should just bite the bullet and buy the unit before it goes out of my budget of $900,000," said Ms Huang, who is in her 40s and does not own any other property.

"After the cooling measures, the price didn't drop but it has stopped increasing at such a scary pace. I think it's quite lucky I didn't buy it then because now I can continue looking over the next few months before buying," she added.

Property agents told The Straits Times that there were some knee-jerk reactions such as last-minute cancellations of home viewings in the days immediately after the cooling measures kicked in on Dec 16.

Huttons Asia agent Jacq Ng said three buyers who were looking for condominium units for investment cancelled their viewings in the same week the measures were announced.

"I'm not 100 per cent certain the cancellations are related to the cooling measures, but before Dec 16, such cancellations were very rare because units move very fast so buyers have to act quickly," said Ms Ng, who has been in the industry for 13 years.

"After they had some time to digest the measures, two of the three who cancelled rescheduled for viewings this week and are hoping to negotiate for a softer price."

Real estate portal PropertyGuru told ST that its site recorded a 6 per cent decline in unique listings in the weeks after the announcement of the cooling measures, with landed property, closely followed by condo units, making the bulk of the listings taken down.

"This decline is higher compared with what we have observed in the pre-pandemic years and can be correlated to the cooling measures," said a PropertyGuru spokesman.

For the first time in two years, agents said they are also seeing seasonality returning to the property market, as more people go on year-end overseas holidays via the vaccinated travel lanes.

Singapore Realtors Inc property agent Harvey Chia said the momentum to buy and sell property is "less rushed" for all parties involved.

"The market is more relaxed now, which is the perfect opportunity for buyers and sellers to recalibrate their needs and wants before entering the market again," said Mr Chia, who has been in the industry for 15 years.

"I think it's human nature for buyers to expect lower prices when you (call it) 'cooling measures'.

"Sellers naturally hope to get the highest price, so if you don't want to adjust your asking price, you probably have to wait a bit longer but all you need is just one willing buyer."