Mr Khaw on Monday said that the property market has shown signs that it’s moving towards a more sustainable path, as he responded to questions on whether the government’s various cooling measures have achieved their intended results.
Mr Khaw reiterated that private home prices registered a marginal decline in the first quarter of this year (0.1 per cent fall quarter-on-quarter), following nine consecutive quarters of moderating price increases.
He said the decline was due in part to the intervention, which includes five rounds of cooling measures over the past two years, the latest of which were introduced in December targeting foreign-investment demand.
The impact of those moves could be seen in the sharp decline of the proportion of housing sub-sales — a proxy indicator of speculative activity — to about 4 per cent, while the proportion of foreign buyers of private homes also dropped “sharply” to 7 per cent, Mr Khaw said. But he didn’t state the time frame or original quantums against which he made the comparisons.
As for public housing market, most first-timers now have a chance to select a Build-To-Order flat if they apply for one.
HDB resale prices have also moderated, increasing by 0.6 per cent in the first quarter of 2012, the smallest price growth in recent years.
MP for Holland-Bukit Timah GRC, Liang Eng Hwa, asked Mr Khaw how the government plans to pace out the supplies of land sales.
“The minister mentioned about some supplies coming in and so on to cool the market. I’d like to ask how the government plans to pace out the supplies of land sales so that while we meet immediate demand, we will not… in the next three to five years, have an oversupply situation, especially in the scenario when there could be an economic slowdown,” asked Mr Liang.
Mr Khaw replied: “The member’s concern about potential oversupply if we are not careful is something I think we all ought to be mindful of, because cycles sometimes get a little bit too exuberant and then when they crash, they can create other kinds of problems.
“That’s why we continue to be very vigilant and monitor closely the situation. Clearly, the market is heading towards a soft landing but we have not landed yet. So, stay seated with your buckle on.”