National Development Minister Mah Bow Tan said the latest property cooling measures were not meant to crash the market.
He described them as “calibrated”, “targeted” and “pre-emptive”. Mr Mah was speaking to reporters at a community event on Saturday.
Explaining the government’s rationale for the recently announced property cooling measures, Mr Mah said a judgement call was needed when property prices were moving faster than what the economy can support.
He said: “When you start to see people queuing up (at property launches), long queues, and you start to read about people buying 2-3 houses at the same time, people with no steady income….I think those are the sort of signs that there’s a little too much exuberance in the market.”
Mr Mah said that there is an abundant supply of private homes, citing figures to show that there are about 34,000 private properties in the market – equivalent to three years’ supply of homes.
He also said that the cooling measures are not permanent, adding that the government will keep an eye on the market and if they are no longer necessary, they will be removed.
Mr Mah noted that these measures will also help some Singaporeans to realise their dream homes.
He said: “These measures will help to ensure that prices are kept within fundamentals. If we can establish that and maintain that then I think there’s no reason why Singaporeans, young Singaporeans, middle-income Singaporeans cannot have that home that they desire.”
Of the four rounds of government measures to cool the red-hot property market over the last two years, the latest which came into effect on 14 January has been the most severe.
Market watchers believe the latest measures will have real bite and will prove more effective than previous attempts to cool rising property prices.
Some factors, like an increase in land supply, may also add downward pressure on private property prices, said analysts.
In the past three years, private developers sold an average of about 12,700 units annually. Should this number be halved this year, private property prices will also be affected, said analysts.
Hence, some buyers can look forward to see home prices taking a dip from their record highs.
Meanwhile, an analyst said completed private developments may prove more popular, following the introduction of the latest property-cooling measures.
SLP International Property Consultants’ research executive director, Nicholas Mak, said: “I think there will be many HDB upgraders who will prefer to buy completed properties, because if they were to sell their existing flats, they can borrow up to 80% of the price of the property from the bank, and at the same time, they would be able to move into the completed property immediately, thereby saving the rental cost.”
Source : Channel NewsAsia – 15 Jan 2011