Saturday, August 1, 2009

Property Buzz Warning

Source : The Straits Times, July 30, 2009

Government will take action if excessive speculation develops

THE Government will take 'whatever action necessary' to prevent excessive speculation in the property market, said National Development Minister Mah Bow Tan on Wednesday.

The topping out of the first tower at the Marina bay Financial Centre yesterday is a key step for the giant project, planned as an extension of the Central Business District. The tower will be complete next year and much of its office space has been pre-leased. -- ST PHOTO: ALPHONSUS CHERN

Mr Mah's note of caution comes amid a buying frenzy that has gripped the real estate sector in recent months.

He told the media on the sidelines of an industry event: 'I wouldn't say there is excessive speculation at the moment, but there is some element of speculation involved.

'Some of the practices and habits that you saw in the last property boom are beginning to come back, so I think we'll have to be careful.'

He also warned about a property bubble forming. 'Obviously it is not in our interest for such a bubble to form, because when it does, and bursts, which it inevitably must, then I think a lot of people will get hurt,' said the minister, adding that all parties concerned must ensure that such a bubble does not materialise.

'A little bit of speculation is inevitable in every market, but when it becomes excessive, then it is something that we should try to avoid.'

There are certainly signs of a red-hot market, including queues forming days before the launch of a new project.

Suburban condo Optima, next to the Tanah Merah MRT, drew lines snaking outside the showflat on Monday, though the unit does not open until Friday.

Real estate agents were also in the queues with blank cheques from clients.

Buyers at Ang Mo Kio were equally keen to put their money down at the 329-unit Centro Residences, reportedly paying $1,150 per sq ft, a price level typically seen in central districts.

Read the full story in Thursday's edition of The Straits Times.

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