By Mr. Propwise

In a recent parliamentary speech, Minister Khaw Boon Wan suggested that his Ministry is looking at ways to bring Build-To-Order (BTO) flat pricing in non-mature estates down to “four years of salary”, where it was before the current property bull market started more than six years ago, down from the current 5.5 times. The media has suggested that this means a potential fall of 30% for BTO prices, which would be disastrous for both HDB resale flat and mass market private property prices.

New flat prices unlikely to fall by 30% on an apples-to-apples basis

However, I believe such an outcome is very unlikely to happen.

First, it is unclear what combination of household income base and flat type Minister Khaw is referring to. Even currently, most households earning the median household income can afford 4-room BTO flats in non-mature estates. Over the last two ...