Since the announcement of the new HDB categorisation framework, buyers and sellers who were looking to purchase HDB flats in the resale market have shied away from doing so and are taking a wait-and-see approach.

Prime Minister Lee Hsien Loong's announcement of the new HDB classification framework at the National Day rally on Sunday (20) has sparked heated discussions in the market. Some property analysts believe that buyers and sellers will keep an eye on the market movement before making a decision, thus staying put for the time being.

Newlyweds Marcus Lim and Tris Marlis, who have been scouting for resale HDB flats for the past three months, are hoping to find an area closer to the city centre and not too far away from their workplaces and parents to buy a flat worth up to S$1 million, reports MediaCorp's English news network CNA.

"We're not sure if prices will start going up or down, or if there will be more demand."

The couple has already contacted a property agent to assist in understanding what impact the new classification framework will pose on the young couple's home buying plans, what the options are, and so on. They will be keeping a close eye on the price trend of their preferred HDB flats before purchasing their home.

Ching Tin Fu, Provost's Chair Professor of Real Estate at NUS Business School, suggested that buyers can wait until the launch of the new Preferred Lot HDB flats (Plus) next year before making a decision.

This also means that for sellers of resale HDB flats in these Preferred Lots, they may not be able to get a higher selling price, he added.

"I think, in a sense, this will help stabilise market prices, both in the resale market and for these Preferred Lot HDB flats; on the other hand, it will also ensure that those who are waiting for their pre-purchased HDB flats will be able to buy them at a reasonable price."

The new categorisation framework for HDB flats abandons the old "mature" and "non-mature" zones and replaces them with Standard, Plus and Prime.

Sun Yanqing, vice-president of Orange Industry Research and Consultancy, said some sellers may take advantage of the new HDB categorisation framework to classify their flats as Prime, in order to push up the selling price.

However, she pointed out that existing HDB flats in preferred lots already command a higher premium due to their prime location, so she estimated that the new framework would not have a significant impact on HDB resale prices.

She also said that there could be a big surge in demand for other types of housing in the short term, as some buyers may turn to the resale market or buy older flats as they do not want to be subjected to the minimum 10-year residency requirement for HDB flats in preferred and prime locations.

In addition, Dr Naija Lee, Head of Real Estate Intelligence at PropertyGuru DataTech, said the new framework will slow down the appreciation of HDB flats in prime locations.

"We have witnessed a significant increase in the prices of HDB flats, including those in Das Leng and other prime locations, which in turn pushed up the overall price trend. Now, with the new HDB categorisation framework, it will help curb the rate of appreciation and I think future generations will benefit from it."