TLDR
The 15-month wait-out period introduced in September 2022 requires private property owners to wait before buying a resale or BTO HDB flat, aiming to curb million-dollar HDB transactions by limiting demand from private owners. However, despite reducing private owner purchases of million-dollar flats from 34% to 12%, the total number of such transactions rose significantly from 370 in 2022 to over 1,000 in 2024. The policy has limited impact on overall price growth and poses financial strain during economic downturns, especially for those facing job insecurity. It forces sellers into costly rental periods during the wait, worsening their situation. Given its limited success and unintended burdens, the policy needs urgent review or removal to offer flexibility and support to homeowners amid economic uncertainty.
The 15-month wait-out period, introduced in September 2022, requires private property owners (unless aged 55 or older and rightsizing to a 4-room or smaller flat) to wait 15 months after selling their private property before purchasing a resale HDB flat. For those aiming for a BTO flat, the wait extends to 30 months. This policy was ostensibly designed to moderate the number of million-dollar HDB flat transactions by curbing demand from private property owners benefiting from significant gains. However, its effectiveness and continued relevance in the current economic climate are increasingly being questioned.
While the policy has reportedly reduced the proportion of private property owners among million-dollar HDB flat buyers (from 34% in Jan-Sept 2022 to 12% in Jan-Nov 2024), it hasn’t significantly stemmed the overall rise in million-dollar flat transactions. In 2022, 370 HDB flats sold for $1 million or more. This number increased to 470 in 2023 and further escalated to 1,035 by 2024. This suggests that the wait-out period has had a limited impact on the broader trend of rising HDB prices, particularly at the top end of the market. If the policy isn’t achieving its primary objective, its continued imposition warrants scrutiny.
The current economic climate further underscores the need to re-evaluate this policy. Singapore’s growth outlook is cautious, with challenges in manufacturing and financial services. Reports of layoffs in the tech sector and difficulties in securing new employment paint a concerning picture for many individuals.
In such an environment, the 15-month wait-out period can impose an undue burden on homeowners. Many who upgraded to private condos after the pandemic, leveraging property gains, may now find themselves financially squeezed by mortgage payments amidst job insecurity or reduced income. While measures like the Total Debt Servicing Ratio (TDSR) aim to prevent over-leveraging, these safeguards offer little comfort when facing unemployment.
For those in distress, selling their private property and transitioning to a more affordable HDB flat becomes a critical step. However, the 15-month waiting period forces them into a prolonged period of uncertainty and potentially expensive rental accommodation. This additional hurdle can exacerbate financial strain during an already challenging time.
The 15-month wait-out period appears to be a policy with limited effectiveness in achieving its stated goal of curbing million-dollar HDB flat transactions. More importantly, in a weakening economy, it creates an unnecessary and potentially cruel burden on homeowners facing financial difficulties. The policy’s continued existence warrants immediate review and consideration for removal to provide much-needed flexibility and support to Singaporean homeowners navigating uncertain economic times.
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