It is report by Straits Times that a total of 4,501 new BTO units has just been launched, of which, the 960 units in Rochor are launched under the new tightened prime location model. Under this new model, when these units are being resale in the open market for the first time, owners of such units will need to pay 6% of the resale price or valuation, whichever is higher, to HDB; this is only only applicable to the FIRST resale transaction and not subsequent resales.
This kind of measure was predicted as early as Jan 2021. So what does this mean to owners of units in prime locations? The immediate thought is that the prices of those HDB in prime locations launched prior to this would benefit as demands of HDB flats in prime location would be directed to them. We may also expect the price of private properties be impacted positively since the gap between the resale BTOs in prime locations launched moving forward would be narrower and some of these demand for properties in prime location would spill over. However, this is assuming that no further cooling measures would be implemented for private properties.
Looking at the current situation, if the private property market in Singapore continue to its upward momentum, we would definitely expect cooling measures for private properties to be implemented by the Singapore government. The last round of cooling measure which had significant impact was in 2018. While it was only 3 years since this was implemented, we cannot assume that the Singapore government wouldn't implement new measures, given its "past record" of implementing 9 rounds of cooling measures from 2009 - 2018.
With the countries slowly opening up their borders and the pent up in demand to travel, we would expect people to direct their expenditure towards this area. And with interests rates expected to go up, we should be expect the prices of properties to "cool down" by itself. However, there is still a slight chance that the opposite would happen, and if so, governmental intervention is anything but inevitable.