As stricter home loan rules weaken demand, the volume of HDB flats being sold below their appraisal value has also increased, media reports said.
In October, 105 flats were sold below valuation, or seven percent of the total volume, based on data from the housing board. This is significantly down from the average 0.3 percent for every month of the first half of the year.
This also implies that the number of flats sold below valuation increased fourfold in October alone compared to the entire period of January to June, when an average of five such transactions were recorded each month.
As such, sellers have been forced to adjust their expectations.
For instance, Assistant Manager Raymond Koh asked for a cash-over-valuation (COV) of S$20,000 for his second floor five-room flat in Punggol earlier this year. When he found no buyers, Kho lowered his COV to "S$10,000, then S$5,000, then zero", he said. After which, "I started going negative".
Currently his nine-year-old flat is priced S$20,000 below valuation. "Any lower and I might as well continue living here," said Kho, who wants to upgrade to an executive apartment or condominium in Sengkang, close to his preferred school for his five-year-old son.
Meanwhile, National Development Minister Khaw Boon Wan revealed that the government will begin tapering off its "massive construction programme from 2014".
"We will do so in a measured way, to allow the market to gradually adjust, just like what we had done to cool the property market earlier," he said in his blog on Monday.
He noted that three years of increased supply helped to restore balance in the housing market, as indicated by the lower COV trend in the HDB resale market and the decline in average Build-to-Order (BTO) application rates – from 5.3 in 2010 to 2.9 this year.
The November BTO and balance flats exercise saw the release of 8,952 flats in a single launch, making it the largest in HDB's history.
"With this, we have delivered over 25,000 BTO flats this year and over 77,000 BTO flats in the last three years," said Mr Khaw.