Government to review 15-month wait-out period for private property owners as HDB prices moderate
The Minister for National Development, Chee Hong Tat, has suggested that the government may remove the 15-month wait-out period for private residential property owners buying a non-subsidised HDB resale flat if resale prices in the HDB market continue to moderate.
The minister was speaking to reporters on May 28 while visiting Toa Payoh Ridge, a Build-To-Order (BTO) project at Lorong 1 Toa Payoh.
Housing statistics published by HDB on April 25 indicate that resale prices saw a quarterly increase of 1.6% in 1Q2025, compared to the 2.6% q-o-q increase that was registered in 4Q2024 and the 2.7% q-o-q increase in 3Q2024.
The 15-month wait-out period was introduced by the government back in September 2022 as part of a package of property cooling measures to tame the housing market at the time. Billed as a temporary measure, it imposed a 15-month wait-out period on private residential property owners after they sell their private property before they are eligible to buy a non-subsidised resale flat.
However, the wait-out period does not apply to seniors aged 55 years and above (and their spouses) who were moving from their private property to a four-room or smaller resale flat.
The package of property cooling measures introduced in September 2022 included a cut in the HDB loan-to-value (LTV) limit to 80% and an interest rate floor of 3% for HDB loans. The LTV limit was further reduced to 75% in August 2024. At the time, price increases in the HDB resale market, particularly for larger-sized five-room flats was heating up, driven by a strong demand for resale flats as pandemic-related construction issues disrupted the comletion of new BTO flats.
Data compiled by OrangeTee indicates that the supply of MOP flats has been decreasing since 2022. “This decline means that the number of flats available for resale has been falling, and the limited supply has likely caused prices to rise continuously over the past few years,” says Christine Sun, chief researcher and strategist at OrangeTee Group. She adds that another contributing factor propelling HDB resale prices could be the rising prices in the private residential market, which have continued to encourage private homeowners to sell their condos to downgrade to HDB flats.
Wait-out period had limited effect
Lee Sze Teck, senior director of data analytics at Huttons Asia, says that the introduction of the 15-month wait-out period may have helped to moderate prices initially. “There was an increasing number of ex-private property owners (ex-PPO) buying larger HDB flats. That may have priced out other buyers who could not afford to compete with them,” he says.
Transaction data compiled by Huttons Asia indicates that the sales volume and average resale price of five-room and executive flats eased immediately in 4Q2022, after the restriction was introduced. Sales volumes and resale prices continued to soften for the next 15 months.
“However, when the first wave of ex-PPO entered the market in Jan 2024, things changed. Volume and average prices of five-room and executive flats increased at a faster pace. The situation in the market is almost back to the pre-3Q2022 period,” says Lee, adding: “It appears that the policy is only effective for 15 months.”
Christine Sun shares a similar sentiment, observing that the introduction of the wait-out period back in 2022 translated to a slowdown in the demand for five-room flats. However, demand for such flats subsequently rose as buyers eventually returned to the market after 15 months. “Hence, we infer that the wait-out period was effective during that period,” she says.
At the same time, year-to-date, there have been 368 million-dollar flat transactions involving five-room and larger flats, a significant jump compared to the 229 recorded during the same period last year, according to data from ERA Singapore.
Some cash-rich buyers homed in on four-room flats, and there has been a noticeable uptick in the number of recently MOP-ed four-room flats in some mature estates, says Eugene Lim, key executive officer of ERA Singapore. Year-to-date, there have been 254 million-dollar transactions involving four-room flats, up sharply from 93 in the same period last year.
Ismail Gafoor, CEO of PropNex Realty, echoes this sentiment and points to resarch from his agency that indicates that the number of flats resold for at least $1 million has declined and stayed relatively moderate after September 2022, before rising around mid-2024 and thereafter.
Source: PropNex Research, data.gov.sg (as of 29 May 2025).
Lee opines that it would not be advisable to review the policy at this juncture, given resale price movements and the limited supply of MOP-ready five-room and larger-sized flats.
“Demand has outpaced the supply of new MOP flats in prime locations, leading to continued price growth in this segment,” says Lim, adding that the HDB resale market sees a “fair bit” of upgrading, from homeowners moving from older to newer flats and from smaller to larger flats.
More time needed for supply changes to take effect
Key to the government’s control of the housing market is ensuring that there is an adequate new public housing supply to alleviate housing delays. The national development minister pointed out that as of March 8, HDB has completed 75,800 flats, with more supply coming online in the next few years.
However, Sun argues that even if housing supply increases over the next few years, it may take one to two years for the full brunt of the supply changes to ripple through the market and impact pricing. “Hence, the timing of when to roll back the restrictions is important,” she says.
In addition, Gafoor points out that there have been three rounds of property cooling measures on the public housing market in recent years - in December 2021 (HDB home loan LTV limit cut to 85%), the September 2022 measures, and another LTV cut in August 2024. "Collectively, these measures alongside the ramp-up in supply of BTO/SBF flats have helped to moderate HDB resale prices," he says.
Gafoor shares his view that with property cooling measures in place, and ample BTO supply in the pipeline, the potential removal of the 15-month wait-out period is not expected to cause a significant upswing in HDB resale prices. Moreover, HDB resale prices have already moved up by a cumulative 19.6% from 3Q2022 to 1Q2025, and he anticipates that the pace of price increase in the coming months will likely ease due a high base effect, and as price resistsnace sets in among some buyers.
On the other hand Lim cautions that, given the limited supply of MOP-ready flats this year, the added demand generated if the wait-out period is revoked has the potential to push prices even higher. “Prematurely rolling back the restriction may risk triggering a rebound in resale price growth, which the policy originally aimed to moderate. That said, it is understandable that there are broader considerations in reviewing the wait-out period, especially amid current economic uncertainties,” says Lim.
Looking ahead, ERA spotlights the bifurcation in the HDB resale market with new MOP flats registering faster price growth compared to older flats. “As a result, we can expect a more moderate pace of price growth, with the faster appreciation in new MOP flats being offset by slower gains in older ones,” says Lim.
Gafoor believes the government will observe the market for another quarter for signs that resale price prices continue to moderate. This would increase the odds that the 15-month wait-out period might be removed in the second half of this year.
"Should the government remove this measure, we believe it will provide more clarity to private home owners who will be able to better plan the next steps in their real estate journey, particularly if they are going to buy a resale flat as a replacement home. It could also benefit owners who wish to monetise their private home and right-size to a HDB resale flat," says Gafoor.
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