Property Market: No Further Plans To Cool It

Source : The Straits Times, Nov 13, 2007

Govt assurance dampens speculation on capital gains tax

THE Government is not planning any fresh measures to cool the property market for now, National Development Minister Mah Bow Tan said yesterday.























GOOD NEWS: The announcement should bring relief to property market players, hit by uncertainty after the deferred payment scheme was scrapped. -- BT FILE PHOTO

His statement effectively hosed down speculation that a capital gains tax might be reintroduced to stop people flipping units for quick gains.

The news brought some relief to players in the property market, which has been hit by uncertainty after the scrapping of the deferred payment scheme two weeks ago.

The 10-year-old scheme, allowing people to buy property with a downpayment but no further payments until the completion of the project, was abolished to curb speculation.

Now, buyers have to make progressive payments while their homes are being built.

The change spooked developers, and was seen as the reason why there were only two bids when the tender for a residential site in Enggor Street in Tanjong Pagar closed on Nov 1.

That followed a sizzling 22.9 per cent growth in private home prices in the first nine months this year. Sub-sales, when uncompleted properties change hands, made up almost 22 per cent of total sales in central Singapore from July to September.

Addressing questions on the scrapping of the scheme in Parliament yesterday, Mr Mah said it was too early to ascertain its overall impact.

But he did not think genuine home buyers would be unduly affected because they could still get home loans from banks. Over time, the change will encourage the property market to grow in a 'more healthy and sustained manner', he said.

Responding to a question from MP Ho Geok Choo (West Coast GRC), he said the Government will closely monitor the market to ensure that prices are supported by economic fundamentals, and that there are sufficient private homes.

He said there is no need for any new measure, and that the Government is not considering any for the property market now. 'Our bias is really not to over-regulate or to interfere in the market if we don't have to,' he said.

If a capital gains tax - which was introduced in 1996 but lifted in 2001 - was imposed again, it would dampen foreign investor sentiment, said the director of research and consultancy at Colliers International, Ms Tay Huey Ying.

'This is good news for the market. It brings stability.'

Mr Mah stressed that there was no reason to panic over a perceived shortage of homes, as there was a stock of 65,000 private homes in the pipeline at the end of September this year.

About two-thirds are likely to be built and made available over the next three years.

Still, househunters such as bank executive Luanne Lim were disappointed at the Government's declaration. The 33-year-old bank executive, who feels private homes have become 'unaffordable', said: 'I think people can still afford to speculate without the deferred payment scheme.'

On the public housing front, Mr Mah said the Housing Board was ramping up its building programme to meet demand for new homes.

MP Cynthia Phua (Aljunied GRC) asked about the supply in the next three years, saying newly-weds found it harder to get new HDB flats.

But Mr Mah said about 4,000 flats will be launched under HDB's build-to-order programme this half year.

He did not think the HDB should meet all demand for new flats. If it did, it would be laying the groundwork for a future oversupply problem.

These same newly-weds would then find it hard to sell their homes if they wanted to upgrade. It was better to channel some of the demand for new flats to the resale market, he said.


MINIMAL INTERFERENCE

'Our bias is really not to over-regulate or to interfere in the market if we don't have to.'

NATIONAL DEVELOPMENT MINISTER MAH BOW TAN, saying there is no need for any fresh measures to cool the property market for now


WELCOME ANNOUNCEMENT

'This is good news for the market. It brings stability.'

MS TAY HUEY YING, director of research and consultancy at Colliers International, on the assurance that no new measures are in the pipeline

No Plans For More Measures To Cool Property Market: Mah Bow Tan

Source : The Business Times, November 13, 2007

No further measures are planned to cool Singapore's booming property market, the government said yesterday, following the end of the deferred payment scheme (DPS) for buying uncompleted private properties.

'There is no need and there is no intention for us to take any further action,' National Development Minister Mah Bow Tan said in Parliament yesterday.

The DPS allowed homebuyers to put down just a 10 per cent or 20 per cent of the price when purchasing a property, with the rest due only upon the project's completion.

Critics said that this was fuelling speculative activity and driving up property prices - leading to the government's Oct 26 announcement that it was withdrawing the scheme.

When asked in Parliament yesterday if the government would look at more measures - such as increasing interest rates - to rein in property prices, Mr Mah said that no further measures are planned. But the government, he said, will continue to monitor the property market closely to ensure that property prices are supported by economic fundamentals.

He added: 'The government will make sure that there is sufficient supply to meet the demand of private housing.' As at the end of September, there were about 65,000 units planned or under construction, he said. Private home prices in Singapore have climbed 22.9 per cent since the start of the year on the back of a supply crunch, official data shows.

The increase in property prices and rentals has contributed to inflation hitting a 12-year high of 2.9 per cent year-on-year in August - and the figure could rise further.

During Parliament yesterday, Trade and Industry Minister Lim Hng Kiang said that inflation could hit 5 per cent in the first quarter of next year.

Mr Mah told Parliament that while it is too early to ascertain the overall impact of withdrawing the DPS, he is confident that the move will pay off.

'I believe that over time, the withdrawal will encourage homeowners to be more financially prudent and dampen some of the speculative activity in the market,' he said.

In the longer term, the withdrawal will encourage the property market to grow in a healthier and more sustained manner, he added.

The DPS was introduced in 1997 when the economy was in recession and the property market was slow. Before the end of the scheme, up to 90 per cent of buyers in some high-profile projects launched by Singaporean developers were opting for such payment schemes, reports have said.

The government said that ending the scheme would compel investors to have enough funds or bank loans available before they agree to buy properties.

Withdrawal Of Deferred Payment Scheme Will Not Affect Genuine Homebuyers: Mah

Source : The Straits Times, Nov 13, 2007

The withdrawal of the deferred payment scheme for property should not unduly affect genuine homebuyers as they can continue to get home loans from banks, National Development Minister Mah Bow Tan said in Parliament on Monday.

Instead, it would dampen speculative activity and encourage buyers to be more prudent with their finances. Over time, it will encourage the property market to grow in a 'more healthy and sustainable manner', said the minister.

The scheme, which allows people to purchase property with a downpayment and pay the rest upon the completion of the project, has been used by 'flippers' as a speculative tool.

After it was srapped on Oct 26, buyers have to make progressive payments in step with the construction process of their development.

Mr Mah stressed that, at the end of September, there was a stock of 65,000 private homes in the pipeline, so there was no reason for Singaporean home buyers to panic.

He said, in response to a question by MP Ho Geok Choo, that the Government will closely monitor the market to ensure that prices are supported by economic fundamentals.

It was not considering any new measure for the market at the moment, said the minister.

Replying to MP Madam Cynthia Phua on meeting the demand for homes, Mr Mah said that the HDB was ramping up its building programme.

He added, however, that the HDB could not meet all new demand for flats, and that some of these buyers would have to turn to the resale market.

If the HDB built to meet all new demand, it would create an oversupply problem should these homeowners want to sell their property in the future.

Related Video Link - http://tinyurl.com/36w88w
Enough supply to meet housing crunch?


The withdrawal of the deferred payment scheme for property should not unduly affect genuine homebuyers as they can continue to get home loans from banks.

National Development Minister Mah Bow Tan made this point in Parliament today even as he stressed that homebuyers need not panic as there was enough housing supply to meet market demand.

Responding to MPs queries, Mr Mah also reiterated that the Government cannot keep on building new flats to cater to 'all demand that comes on stream'.

Youth Olympics And F1 For Gardens By The Bay?

Source : The Straits Times Video News

Singapore's Gardens by the Bay, the world's first public gardens in the tropics, will incorporate F1 racing and perhaps, possibly be a venue for the Youth Olympics should Singapore win the bid to play host city in 2010.

The landmark attraction will also add economic value to Singapore. with the surrounding land and property value to go up significantly - possibly up to $8 billion over the life of the development - as the area will become more desirable to work and live in.

National Development Minister Mah Bow Tan made these points at the groundbreaking ceremony for the Gardens this morning.

Related Video Link - http://tinyurl.com/2lylko
Youth Olympics and F1 for Gardens by the Bay?

Govt Plans No New Steps To Cool Property Market: Mah

Source : The Straits Times, Nov 12, 2007

SINGAPORE is not planning to take further steps to cool down the city-state's booming property market after it withdrew a scheme last month that allowed buyers to delay payments for property, the government said on Monday.

Residential property prices in Singapore have soared to their highest levels in a decade, fueled by a supply crunch and a strong economy as well as liberal payment schemes that allow buyers to make a 10 to 20 per cent deposit and delay the bulk of payments until a project nears completion.

'There is no need and there's no intention for us to take any further action,' Mah Bow Tan, Minister for national development, told parliament.

'The government will continue to closely monitor the property market to ensure that our prices are supported by economic fundamentals.'

'The government will make sure that there is sufficient supply to meet the demand of private housing.'

Related Video Link - http://tinyurl.com/2poluj
'No reason to panic' over private property supply: Mah


National Development Minister Mah Bow Tan has reiterated that the Government will not take any further action to cool down the red-hot property market.

Speaking to the House, Mr Mah stressed that the Government will not interfere or over-regulate the market.

In any case, the Minister added, there is sufficient supply to meet demand in the private property sector.

The sharp rise in prices has left some government leaders worried this could threaten Singapore's competitiveness with rival Hong Kong, where property prices are higher.

Inflation in the city-state hit a 12-year high of 2.9 per cent year-on-year in August and the government said on Monday consumer prices could potentially surge up to 5 per cent in the first quarter of next year.

Singapore's government said last month it withdrew the deferred payment scheme for the sale of uncompleted private residential and commercial properties.

The scheme was introduced in 1997 when the economy was in recession.

Up to 90 per cent of buyers in projects by Singapore property developers such as City Developments and Keppel Land opted for such payment schemes.

The government said the move would encourage greater financial prudence among investors by compelling them to seek sufficient funds or adequate bank loans before they commit to buying a property.

According to official date, Singapore private home prices rose 8.3 per cent between July and September, or more than 21 per cent since the start of the year. -- REUTERS