Sales of five-room and executive flats have been the worst hit by the shrinking Housing Board resale market.
Not only are fewer of these large flats being sold, but they are also taking more than twice as long to find buyers, compared with five years ago.
This is despite prices falling since the start of last year. The median cost of a five-room flat in
Sengkang, for example, was $495,500 in the second quarter of this year, down from $523,000 at the start of last year.
An executive flat in Woodlands now fetches $600,000, down from $629,000 before.
According to property experts and agents, the declining interest is due to recent home loan curbs turning more buyers away from these more expensive units. Some sellers also remain reluctant to accept lower prices.
Since peaking at 34.4 per cent in 2009, the resale market share of five-room and executive flats has fallen to 27 per cent in the second quarter of this year, according to the latest HDB figures.
Data from property firms also showed that it was getting harder to find a buyer.
ERA Realty said it took an average of 31 days in 2011 to sell a five-roomer or an executive unit. Now, it takes around 47 days.
Figures from PropNex Realty also showed that such flats took one to two months to sell in 2009. This lengthened to two to three months last year. This has now stretched to between three and five months.
The mortgage servicing ratio limit, which caps the share of monthly income that can be used for housing loans, was lowered from 35 per cent to 30 per cent last August.
"This limits the size of the loan a buyer can get. So they now tend to avoid higher-priced flats," said ERA Realty key executive officer Eugene Lim.
The new total debt servicing ratio, introduced last June, has also made it harder for buyers to get a maximum loan of 80 per cent.
That means buyers who are keen may be unable to get the necessary financing, said SLP International Property Consultants head of research Nicholas Mak.
One seller of an executive flat in Ang Mo Kio, who declined to be named, has faced just this issue. "There are interested viewers, it's just that some of them cannot get the loans," he said.
And because executive units are rare, sellers seem to be less willing to compromise on price in order to close a deal, said Mr Lim.
The HDB stopped building new executive flats in the early 2000s.
Five-room flats make up about a quarter of existing HDB flats, but executive flats account for just 7.5 per cent.
Added PropNex Realty chief executive officer Mohamed Ismail Gafoor: "The increase in supply of Build-To-Order flats has also swung buyers over from the resale market."
BTO supply was ramped up from 2011 till 2013, with more than 25,000 new flats launched each year.
All of this has made it harder for sellers, who have had to accept lower prices or shelve their downgrading plans.
One seller who had to face the new market reality was 43-year-old Janice Tan, who put her five-room Jurong West flat on the market in March.
A deal was closed last month - but only after she and her husband lowered their price for the unit, which had previously been valued at $500,000.
"We actually went much lower, by about 8 per cent," said the human resources executive. Given the current market, they believe they had little choice, she added.
And that is precisely what property experts have been urging: for sellers to be more realistic in their expectations.