SINGAPORE: The government will begin to taper off massive construction of public housing from 2014 as supply and demand for public housing return to balance.
In a blog post published on Monday evening, National Development Minister Khaw Boon Wan said the last three years of sustained ramp-up have helped to "restore the balance in our housing market".
However, Mr Khaw said the tapering will be done in a "measured" way to allow the market to gradually adjust, just like the government had done to cool the property market earlier.
Mr Khaw noted in his blog that as the November's Build-to-Order (BTO) and Sale of Balance Flats (SBF) launch - the last exercise for the year, draws to a close on Monday, the average BTO application rate has fallen from a high of 5.3 in 2010, to a low of 2.9 this year.
The November exercise saw 8,952 flats in a single launch, making it the largest in HDB's history.
Mr Khaw said with this, HDB has delivered over 25,000 BTO flats this year and over 77,000 BTO flats in the last three years.
He said HDB has cleared the backlog of young families buying their first flats, with average BTO application rate for first-timers holding steady at below two times.
BTO application rate for second-timers has also fallen from a high of 25.9 times in November 2011, to 2.4 times in the current November exercise.
While singles' demand continues to be high, Mr Khaw noted that the BTO application rate for singles has come down from 57.5 times in July this year, to 25.2 times in the latest BTO exercise.
Lower application rates for November's BTO and SBF exercise
As of 5pm on Monday, the application rates for November exercise are relatively lower this time round.
For example, the number of applications for BTO flats in areas such as Sembawang is lower than the number of flats put up for sale.
There were 85 applicants for 174 five-room units in Sembawang. In Bukit Batok, there were 401 applicants for 591 four-room units in Bukit Batok.
Analysts said the results are not surprising.
Eugene Lim, key executive officer at ERA, said: "Due to the sheer number of flats that have been put on sale, this is possibly the biggest number of flats that have been put on sale in recent times."
Mr Lim also cited the wide variety of locations and the types of flats available as possible reasons for the lower demand.
According to analysts, home buyers are also lured by the lower cash premiums in the resale market.
"Cash premiums have come down, it is nice to see valuations, or sale prices equal to valuation or below valuation. This has attracted some buyers back to the resale market again," explained Chris Koh, director of property firm Chris International.
"Moving forward, I should see more demand now coming back to the resale market because prices of the resale flats have gone down."
According to figures from the Housing and Development Board, the average number of flats transacted below valuation was five per month in the first half of 2013. The number has increased to 105 in October 2013.
And while the government has launched 25,000 new flats this year, Mr Koh believes authorities are unlikely to commit to a figure next year, and will probably monitor and adjust BTO supply after every exercise. - CNA/fa
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