Not time yet to remove cooling measures: Khaw

[reporter2]

http://www.businesstimes.com.sg/sub/...40740,00.html?

Published October 20, 2011

Not time yet to remove cooling measures: Khaw


(SINGAPORE) National Development Minister Khaw Boon Wan yesterday said that it is not time yet to remove property cooling measures and that the government will continue to release land to meet private housing demand.

In a speech in Parliament, he noted that private housing currently makes up 23 per cent of Singapore's housing market and meets the upgrading aspiration of higher-income Singaporeans, besides housing the permanent residents and foreigners who come here to work and live. 'URA will continue to release land parcels to meet the demand.

'Four rounds of cooling measures have also had their effect. There have been some calls for their removal but I don't think it is time yet. The global economic uncertainties have also tempered exuberance,' he said.

Urban Redevelopment Authority's latest flash estimate released earlier this month showed that the escalation in the private home price index has moderated for eight consecutive quarters. The 1.3 per cent quarter-on-quarter rise in the index in Q3 2011 was the lowest rate of increase over the past two years. 'We will continue to monitor market conditions closely, and if need be, we will take further measures,' Mr Khaw said.

The government has rolled out four rounds of measures - between September 2009 and January 2011 - to cool the private housing market. Standard Chartered Bank property analyst Regina Lim does not believe that further cooling measures will be announced. 'At this point in time, a lot of people who are buying are not speculators. They are buying for investment or their own occupation. How do you stop them?'

However, Ms Lim argues that it is not time to remove the existing cooling measures either because interest rates are still low. 'Interest rates of about one per cent on home mortgages, for a country with 5 per cent annual GDP growth are distorting people's behaviour and making them buy more housing. Unless we have a nominal interest rate of about 3.5 per cent, we still need the cooling measures,' she added.

But Ms Lim predicts that the supply of private housing land that the Ministry of National Development will release under the confirmed list in the first half 2012 Government Land Sales (GLS) Programme may ease, perhaps to about 3,000-4,000 private homes (including executive condos), after three consecutive rounds of half-yearly land sales programmes for about 8,000 private homes since H2 2010. 'This would have made up sufficiently for the undersupply in the past 10 years,' she reasoned.

Credo Real Estate executive director Ong Teck Hui does not expect the government to remove the present cooling measures or reduce the quantum of confirmed list land sales for H1 2012 given that private home prices have not come down and developers' sales are still strong.

URA figures released earlier this week show a rebound in developers' private homes sales in September. They sold 1,631 private homes, excluding ECs, last month, up 20.7 per cent from August. Including ECs, the September sales volume rose 25.8 per cent month on month to 2,064 units.

'The authorities would probably adopt a more prudent approach of adjusting the GLS Programme if the economy deteriorates rather than to pre-emptively reduce the quantum now,' said Mr Ong.

[reporter2]

http://www.straitstimes.com/PrimeNew...ry_725168.html

Property cooling measures will stay

Published on Oct 20, 2011


PRIVATE home price rises may have moderated over the past two years but National Development Minister Khaw Boon Wan said yesterday that the property cooling measures will stay.

The Government has introduced four rounds of measures to cool the market since September 2009. They included imposing a higher stamp duty if a property is sold quickly and capping loans as a proportion of a home's value.

Much more residential land has also been released. The resultant slowing in price growth has led to some calls for the removal of the measures.

However, Mr Khaw said in Parliament yesterday that he did not think it was time to do so yet.

Global economic uncertainty has tempered exuberance, with price gains moderating for eight straight quarters, but the Government will continue to monitor market conditions closely, he said. It will take further action, if necessary, he added.

Private homes make up 23 per cent of the housing market. Besides housing permanent residents and foreigners, they meet the upgrading aspirations of higher-income Singaporeans, Mr Khaw said.

The Urban Redevelopment Authority (URA) will also continue to release land to meet this demand.

Most experts agree that the cooling measures should be kept in place, especially in the light of strong new private home sales of 1,631 homes last month - a 21 per cent jump from August.

Mr Colin Tan, Chesterton Suntec International's research head, said the measures provided stability, with URA price data inching up just 1.3 per cent in the third quarter - the lowest rate of increase over the last two years.

If they were removed, sales volumes would be even higher with prices possibly edging up further, he noted.

However, some have suggested fine-tuning certain measures that have affected genuine upgraders.

Mr Tan Kok Keong, OrangeTee's head of research and consultancy, said the sellers' stamp duty of up to 16 per cent deterred speculators and should be kept.

However, the Government could review the implementation of the loan-to-value ratio, especially for genuine upgraders. The ratio is currently capped at 60 per cent for all home buyers with an existing mortgage.

Mr Tan also said the resale market has cooled and suggested that the Government place more land on the reserve list in its next land sales programme so that the market can dictate supply instead.

ESTHER TEO

[kane]

after September numbers, I think it's unlikely he will be removing the CM soon. if he removes some of the CM, next month's numbers could be well over 2k inclusive of EC.

[ysyap]

I'll be thankful if he doesn't add another cooling measure.

[kane]

I'll be thankful if he doesn't add another cooling measure.

Developers need to moderate their expectations on the profit margins.

[solsys]

Developers need to moderate their expectations on the profit margins.

Agreed. They should rake in their profits from overseas instead.

[kane]

Agreed. They should rake in their profits from overseas instead.

Not many overseas spaces for them to play in. Even Chinese developers are here tto play in our space.

[ysyap]

The big players can certainly play overseas from Shanghai to HK to Australia. The smaller players probably will remain in their comfort zone till after the impending economic crisis!

[ysyap]

Developers need to moderate their expectations on the profit margins.

Any new measures for the property market should be directed to the developers and agents, not on buyers anymore...

[rattydrama]

Any new measures for the property market should be directed to the developers and agents, not on buyers anymore...

then developer will cost in the extra charges to their land bid price.

[kane]

then developer will cost in the extra charges to their land bid price.

Their margins are already being compressed. They would be courting trouble if they keep thinking the buyers can absorb everything that's passed to them.