Enough homes for all, says Khaw

National Development Minister Khaw Boon Wan says “plenty” of housing units are coming on stream, with about 200,000 units to be built by 2016.

Of these, about 80,000 are private properties, 10,000 are Executive Condominiums and 110,000 are HDB units.

Mr Khaw said this is equivalent to the building of four new Ang Mo Kio towns by 2016.

He made the comments in a blog post, “Enough Homes for All”, on Friday.

Mr Khaw believes supply in the property market will catch up with pent-up demand — in two, three or four years.

He pointed out that the market is temporarily not in balance because of under-building in the past and high investment demand today.

Turning to the package of measures introduced last week to cool the property market, Mr Khaw called it a necessary move.

He said doing nothing would be to allow prices to run beyond economic fundamentals.

This would only invite a large and serious price correction in the future and will not do anyone any good.

Mr Khaw said the package was carefully formulated to protect first-timers.

The new measures include higher buyer’s stamp duty, targeting at property investors.

In addition, potential buyers who have an existing housing loan will need to pay more cash upfront if they want to buy another property.

Mr Khaw noted that investors buying additional properties may be disappointed, but he hopes they will accept that the package will also be good for them.

He explained that the new measures are counter-cyclical in nature, to be lifted when the market regains its balance.

Donald Han, HSR Property Group’s special advisor, said: “There is always that concern that in the last three years, the government has done seven cooling measures. So, it’s a lot compared to other parts of the world. But if you put things in perspective again, Singapore has always remained as a hotspot. It’s always in the foreign investors’ radar.”

“The cooling measures certainly have put things in perspective, taken a little bit of hot air off from the balloon. If it had not come in, we will see a price increase of about up to 10 per cent for this year. But the fact it came in, I think generally, prices are likely to moderate to a ‘flatish’ level,” he added.

Mr Khaw also advised those contemplating buying a property to be prudent.

They must bear in mind the fact that the current low interest rate is unusual, and be aware that normal high interest rate will return in time to come, he said.

Source : Channel NewsAsia – 18 Jan 2013

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