Locals form over 80% of private home buyers, foreign ownership up

The number of foreigners owning private property in Singapore has grown to 16 per cent in the first half of this year, compared to 12 per cent for the whole of last year.

National Development Minister Khaw Boon Wan revealed the numbers in Parliament on Thursday, in response to concerns from several MPs about the impact of property ownership by foreigners.

Despite the growing demand from foreigners, Mr Khaw said locals still account for more than four-fifths of all private home purchases this year.

He said recent cooling measures are having a clear impact though the full effects will take some time to achieve.

While the private housing market is still rising, the rates of price increase have been trending down since the third quarter of 2009.

So far this year, the price increase was 6 per cent, compared to the 18 per cent rise for the whole of 2010.

For successful Singaporeans who aspire to own private properties, Mr Khaw said the government will ensure an adequate supply of land for such developments.

Mr Khaw said: “In response to strong demand, we have ramped up supply of land through the Government Land Sales programme. This year, we are releasing land for over 14,500 units to the market, compared to 10,000 units last year.

Today, there are still 34,000 unsold private housing units, equivalent to more than two years of demand. We will keep up the land sales programme until the market stabilises fully. The new supply will take time to come on stream, but over time it will help stabilise our private property market.”

Mr Khaw stressed that rising property prices cannot be attributed solely to foreign purchases.

He pointed to other factors such as low interest rates and Singapore’s strong economic fundamentals.

Still, he does not rule out taking further measures if the situation calls for it, though he remained tight-lipped on what these changes could be.

“Much more important is, I hope Members (of Parliament) are mindful that cooling measures – whether addition of new measures or subtraction of existing measures – are market sensitive, so that makes it difficult for me to be too expressive in my reply, and I think I should just stop here,” said Mr Khaw.

Later, replying to Non-Constituency MP Gerald Giam, Mr Khaw said the Housing and Development Board (HDB) takes into account demographic profiles and housing needs when planning the supply of various flat types.

Mr Giam had noted that smaller flat types saw lower application rates and asked if cost was a factor.

The minister assured him that smaller flats were priced at more affordable prices than larger units, adding that it is “impossible” to achieve identical application rates for all room types.

Mr Khaw said: “Even if you’re able to project, that also cannot be the way we do things. Because when we design a housing estate – … adding on to say an existing Tampines area – we have to take into account what is the housing distribution in Tampines, and then we plan that way.

“But as I said, regardless of the different application rates, at the end of the day, no units get wasted. They will all be taken up finally.”

On the issue of rental flats, the National Development Minister said rental flats will make up 5 per cent of all HDB households by 2015.

He said the HDB is building more rental flats to further shorten the waiting time for flat allocation to low-income families.

Currently, the average waiting time for a flat allocation is six months.

Mr Khaw said the country’s supply of rental flats will soon reach 47,000 and another 3,000 units will be added next year.

“As we build more rental flats, we must ensure that they are safeguarded for poor and needy households who cannot afford to own a home, have no family support, and do not have other housing options. It is important that HDB maintains strict rules and criteria to do so. Nonetheless, HDB will exercise flexibility to help those who do not meet the rules but worthy of consideration,” said Mr Khaw.

Source : Channel NewsAsia – 20 Oct 2011

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