Why these Cooling Measures (Sept 2022) will not Work?

cooling measures

New cooling measures (Sept 2022) were introduced to keep the price growth of Singapore’s housing market sustainable. But here is why this round of cooling measures will not work, in the longer term perspective.


     Table of Content

  • Cooling Measures (2022)
  • The Biggest Impact
  • Why It will not Work


📌 Cooling Measures (2022)

The latest curbs (30 Sept 2022) were deemed milder than previous measures and mainly targeted the HDB resale market.

The 15-month wait period was introduced because the number of private property owners buying HDB resale flats has doubled in the last 2 years, as compared to the previous 2 years. This will also reduce the number of $1 million dollar flats transactions.

It would be interesting to see whether rising interest rates, lowered LTV, a 15-month wait period and the looming threat of recession might be enough to put off investors and cool the property market.

cooling measures

📌 The Biggest Impact

This round of cooling measures is unlikely to have much impact on the private property market., although private property owners, who have to wait for 15 months, may now turn to the smaller units in the private property resale market.

The key focus is to keep the HDB market affordable. HDB resale transactions are expected to drop and resale prices should slow down after rising by 5% in the first half of this year.

Analysts and home buyers have expressed concern that prices of 4-room and smaller resale flats may be driven up by the curbs on the larger HDB resale units.

As such, prices of four-room and smaller Housing Board resale flats will be monitored for any increase arising from the recent round of cooling measures as mentioned by Mr. Desmond Lee, Minister for National Development.

📌 Why It will not Work (Longer Term Perspective)

Would these cooling measures actually work? Some think that it will slow the market for a while, like a knee-jerk reaction that would last for a few months, before the prices bounce back and spiral upward?

The government wants to keep HDB flat prices affordable but the prices of the new flats will directly affect the prices of resale flats. This is because the government has stated openly that the prices of the new flats will be priced relative to the prices of resale flats with a discount.

With this direct link between the prices of the new BTOs and resale flats, the 2 segments will be playing catch up with each other in terms of pricing. Analysts have mentioned that as long as HDB uses this method to price new BTO flats, prices will increase eventually.

HDB flat is regarded as an asset and it is tied to our retirement plan. However, based on the capital appreciation and pricing of the HDB flats, it is difficult to call HDB flats “Public Housing”

There is also the issue with housing grants as these grants are supporting the prices of HDB flats. Grants help a buyer to buy a flat but will not bring down the prices of flats. Therefore, these cooling measures may only be effective in the short term perspective.


Having said all of the above, the policy objective and public mantra of the government have always been a healthy and sustainable property market. However, the growth of the market is hardly frowned upon, except when prices start to go crazy.

What will be the next round of measures should prices continue to increase? Should private property owners still be allowed to hang on to their HDB flats?

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