ecimbew
04-03-11, 08:11
Ensuring property market's stable growth for all
Minister for National Development assures young couples, Govt will help them set up their first home
by Mah Bow Tan
05:56 AM Mar 04, 2011
Everybody knows the property market was very hot last year. This was due to various factors: Low interest rates, excess liquidity, and jobs growth attracted many buyers into the market. Some were upgraders and investors. Others were speculators out to make a quick buck.
High property prices have made some Singaporeans happy. But others worry that they have missed the boat, worry that prices will go up even further. It is hard for both groups to be happy at the same time. Property prices and economic growth go hand-in-hand. Property prices cannot be expected to stagnate while the economy is powering ahead as it has done.
What the Government can, and will try its best to do, is to stabilise the market and moderate price increases amidst extraordinary economic growth.
We acted early to pre-empt a bubble from forming. I remember sounding the alarm in mid-2009, when I saw property prices start moving up. We introduced the first set of cooling measures in September 2009. Since then, three more sets of cooling measures were introduced, in February and August last year and, just recently, in January.
At the same time, we ramped up the supply of private housing through the Government Land Sales programme to meet demand. As at Q4 2010, the latest figures that I have, 33,000 units of private property remained unsold. This is equal to three years of supply based on the average annual take-up over the last five years. I have mentioned this figure many times, URA has included this figure many times; in fact, they do so in every one of their press releases. But, I guess, if the market is hot, such inconvenient truths are conveniently ignored. Yes, we will be supplying even more under our land sales programme. So there is absolutely no need to rush into the market.
The efforts we have made so far have prevented prices from spiralling out of control. The rate of price increase has reduced quarter-on-quarter and continued to fall since the first set of measures were introduced in September 2009. Subsales have been kept in check. Subsales is usually used as a proxy for speculation; in Q4 2010, subsales were 7 per cent of all transactions, compared to 13 per cent in Q2 2009, when we started to introduce cooling measures when the market picked up strongly.
But how the market moves in the next few months will depend on many factors - state of the economy, interest rates, liquidity, and external factors, what is happening in the Middle East and oil prices, etc. We will continue to keep a close eye on the market and act again if there is a need. Some people say that our measures have added uncertainty to the market. I beg to disagree. In fact, what is certain is that the Government is determined to do whatever is necessary to maintain market stability.
I use three words to describe our approach - pre-emptive, calibrated, targeted. Pre-emptive - in the sense that we act before prices run away and before a bubble is formed. Calibrated - we intend to cool but not to crash the market. We apply the brakes gradually and consistently, so that we do not have to slam the brakes and cause either the car to stall or worse, people to fall out through the windscreen. Targeted - to hit those who are speculating for short-term gains or those who are inclined to over-borrow to invest in property; it is not intended to affect the first-time genuine home buyers.
(One MP) asked if we should restrict purchase of landed properties by Permanent Residents. The purchase of landed properties is restricted to citizens and PRs, and PRs today are required to meet certain strict criteria to be allowed to buy landed properties. I will relay the suggestion to further tighten these criteria to the Ministry of Law.
(An MP) also suggested doing away with the Reserve Price of sites so as not to set any floor to the tender prices. A Reserve Price is necessary, as it is the Government's duty as the custodian of State land and, as members know, all proceeds from sale of land reverts to past reserves, as the custodian of State land, we must ensure that we maintain or we get a fair market price for the sale of land. But the Reserve Price only serves as a guide and not a strict criteria. In fact, the Government has awarded sale sites in the past even when the top bid was below the Reserve Price.
Read more
http://www.todayonline.com/Singapore/EDC110304-0000270/Ensuring-property-markets-stable-growth-for-all
Minister for National Development assures young couples, Govt will help them set up their first home
by Mah Bow Tan
05:56 AM Mar 04, 2011
Everybody knows the property market was very hot last year. This was due to various factors: Low interest rates, excess liquidity, and jobs growth attracted many buyers into the market. Some were upgraders and investors. Others were speculators out to make a quick buck.
High property prices have made some Singaporeans happy. But others worry that they have missed the boat, worry that prices will go up even further. It is hard for both groups to be happy at the same time. Property prices and economic growth go hand-in-hand. Property prices cannot be expected to stagnate while the economy is powering ahead as it has done.
What the Government can, and will try its best to do, is to stabilise the market and moderate price increases amidst extraordinary economic growth.
We acted early to pre-empt a bubble from forming. I remember sounding the alarm in mid-2009, when I saw property prices start moving up. We introduced the first set of cooling measures in September 2009. Since then, three more sets of cooling measures were introduced, in February and August last year and, just recently, in January.
At the same time, we ramped up the supply of private housing through the Government Land Sales programme to meet demand. As at Q4 2010, the latest figures that I have, 33,000 units of private property remained unsold. This is equal to three years of supply based on the average annual take-up over the last five years. I have mentioned this figure many times, URA has included this figure many times; in fact, they do so in every one of their press releases. But, I guess, if the market is hot, such inconvenient truths are conveniently ignored. Yes, we will be supplying even more under our land sales programme. So there is absolutely no need to rush into the market.
The efforts we have made so far have prevented prices from spiralling out of control. The rate of price increase has reduced quarter-on-quarter and continued to fall since the first set of measures were introduced in September 2009. Subsales have been kept in check. Subsales is usually used as a proxy for speculation; in Q4 2010, subsales were 7 per cent of all transactions, compared to 13 per cent in Q2 2009, when we started to introduce cooling measures when the market picked up strongly.
But how the market moves in the next few months will depend on many factors - state of the economy, interest rates, liquidity, and external factors, what is happening in the Middle East and oil prices, etc. We will continue to keep a close eye on the market and act again if there is a need. Some people say that our measures have added uncertainty to the market. I beg to disagree. In fact, what is certain is that the Government is determined to do whatever is necessary to maintain market stability.
I use three words to describe our approach - pre-emptive, calibrated, targeted. Pre-emptive - in the sense that we act before prices run away and before a bubble is formed. Calibrated - we intend to cool but not to crash the market. We apply the brakes gradually and consistently, so that we do not have to slam the brakes and cause either the car to stall or worse, people to fall out through the windscreen. Targeted - to hit those who are speculating for short-term gains or those who are inclined to over-borrow to invest in property; it is not intended to affect the first-time genuine home buyers.
(One MP) asked if we should restrict purchase of landed properties by Permanent Residents. The purchase of landed properties is restricted to citizens and PRs, and PRs today are required to meet certain strict criteria to be allowed to buy landed properties. I will relay the suggestion to further tighten these criteria to the Ministry of Law.
(An MP) also suggested doing away with the Reserve Price of sites so as not to set any floor to the tender prices. A Reserve Price is necessary, as it is the Government's duty as the custodian of State land and, as members know, all proceeds from sale of land reverts to past reserves, as the custodian of State land, we must ensure that we maintain or we get a fair market price for the sale of land. But the Reserve Price only serves as a guide and not a strict criteria. In fact, the Government has awarded sale sites in the past even when the top bid was below the Reserve Price.
Read more
http://www.todayonline.com/Singapore/EDC110304-0000270/Ensuring-property-markets-stable-growth-for-all