SINGAPORE - Prices of four-room and smaller Housing Board resale flats are being monitored for any increase arising from the recent round of cooling measures, said National Development Minister Desmond Lee on Saturday.

This comes as some aspiring home buyers and analysts have expressed concern that while the curbs imposed on private property owners may moderate demand for five-room and larger HDB resale flats, they may inadvertently drive up demand, and therefore prices of four-room and smaller resale flats.

Since Sept 30, private property owners must wait 15 months after the sale of their current home before they can buy a non-subsidised HDB resale flat.

However, those aged 55 and above are allowed to move from a private property to a four-room or smaller HDB resale flat.

Referring to the 15-month wait-out period, Mr Lee said: “While the measure is temporary and moderates demand, we have to recognise that there are seniors who need to provide for retirement adequacy, we have to provide them with options and avenues to downgrade or right-size, so we say four-room and smaller to meet seniors’ needs.”

He was speaking to The Straits Times on the sidelines of a Forward Singapore youth dialogue session on housing issues.

“We’ll have to monitor to see how the market responds, we’ll have to see,” he said when asked if he foresees any ripple effects arising from the measures.

Mr Lee said the number of private property owners buying HDB resale flats has doubled in the last two years, compared with the previous two years.

“Of course, this has to do with the property cycle as well. Broadly, when they sell their private properties and move into the HDB resale market, generally... they can pay more and higher cash over valuation,” he said, adding that one in 10 HDB resale flat buyers belongs to this group.

On the timing of the recent measures, which came nine months after the previous round of curbs, Mr Lee said: "There are no rules that say cooling measures need to have a certain length between them.

"We need to look at market conditions and decide whether they are in line with economic fundamentals. Or are they headed off and therefore we need to take decisive measures to tackle them and let the measures work their way through."

The cooling measures, which kicked in on Sept 30, came as HDB resale prices increased by 7.8 per cent in the first nine months of 2022, fuelled by hot money from private property downgraders flowing into the HDB resale market, coupled with pandemic-related disruptions in the construction sector.

At the event on Saturday, Mr Lee reiterated that the measures are aimed at moderating demand in the HDB resale market and at ensuring buyers borrow prudently for home purchases.

“While the resale market has been soft for six years prior to the pandemic, rising resale prices and eye-catching headlines over the last two years have caused anxiety about housing affordability,” he said.

On top of climbing HDB resale prices, the number of flats changing hands for at least $1 million has also not let up. A total of 277 such transactions have been made to date in 2022, smashing the tally of 259 such deals for the whole of 2021 with three months to spare.

Mr Lee said: “We are committed to intervene and do what is necessary to ensure a stable property market and affordable public housing for Singapore… We will do so decisively but carefully because of the uncertain global economic outlook and a significantly higher interest rate environment.”