By Wong Siew Ying | POSTED: 02 Sep 2013 8:40 PM | CNA

SINGAPORE

The policy changes announced by the Housing & Development Board (HDB) last week are likely to have ripple effects on other segments of the property market in the months ahead, said analysts.

The HDB barred new permanent residents (PRs) from buying resale flats till three years after obtaining their PR status. It also introduced further loan curbs.

Transaction volume for resale flats has already thinned and property agency ERA said HDB’s resale price index may even see negative growth as early as the fourth quarter of this year.

If so, it will be the index’s first drop in almost five years.

HDB resale flat prices have increased by 1.8 per cent in the first half of 2013.

Apart from maintaining stability in the HDB resale market, analysts said the policy changes will benefit the leasing market. The private resale segment could also get a lift as some new PRs turn to mass-market condominiums for their housing needs.

Some analysts said the changes could also potentially moderate bids for government sales of sites in the upcoming months.

Mohamed Ismail, CEO of Propnex, said: “I don’t think we are going to witness new record prices in the upcoming land sites. Most of these upcoming sites are in the outlying areas.

“I think the developers will take into consideration the current sentiment; the prices could be muted or similar to the last couple of land bids or maybe marginally lower.

“But I am not expecting the land bids to come down by 10 to 20 per cent.”

– CNA/gn

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