National Development Minister Mah Bow Tan said the previous day that home owners will be aided by the government during the economic downturn, though moves to temporarily support the private property market are less likely to progress in these trying times.
Buyers may probably think of staying on the sidelines due to the uncertainty in the economy, Mr. Mah told the media last night at a variety show for Chinese New Year and hongbao presentation that took place in Tampines East.
“We’re in recession…and there’s a lot of uncertainty. People are concerned about their jobs, and all this is feeding through into the property market. Even if there’s demand, I think there’s a lot of wait-and-see attitude,” said Mr. Mah.
There were only 4,287 homes sold for the previous year, according to the Urban Redevelopment Authority’s (URA) data released earlier this month, capping new sales’ worst year since 1990.
Mister Mah also stated that the authorities are closely keeping an eye on the market. “If there’re sensible measures we can take, we’ll certainly do so,” he said.
Some experts stated that several measures, including the reintroduction of the shelved payment scheme or temporary suspension of stamp duty, might boost the property market as they are likely to provide buyers with better incentive to buy homes.
The deferred payment scheme was establish at the time when Asia suffered from the financial turmoil. It was designed to improve the market, but it was cancelled in 2007. Through this deferred scheme, buyers were given the chance to get hold of a property for just a small down payment and flip it afterwards to gain a profit.
Basically, stamp duty is a tax, which must be paid for the documents regarding shares and properties to be stamped (e.g. mortgages or leases).
“At this stage, it’s not the right time for us to talk about stimulating demand,” Mr. Mah said. “Until there’s a little more certainty in the market, it’s pointless to talk about artificial measures to stimulate demand. They’ll not work,” he added.
Mister Mah also said that the government has done its part to help “stabilise” the market through the removal of excess supply. The authorities have also attempted to release sufficient information as much as possible, which include prices and sales figures. Therefore, the market “knows what’s happening” and making “informed decisions” will be possible for buyers.
Last month, the Ministry of National Development (MND) announced that it had made a decision that for the first two quarters of the current year, it will not add to the Government Land Sales Programme any land sites.
“This will help to stabilise the market and ensure there is no further overhang,” said Mr. Mah, referring to the move. The National Development Minister, as for the Budget next week, said that he could not expose any other detail, though the focus will remain on assisting “people hurt in the economic crisis”. The authorities are thinking of how they can give support to homebuyers who want to own homes. Helping the elderly monetise the homes they own so as to earn money will be considered by the government as well.
Mister Mah is also hoping to see the lease buyback scheme of the government to be implemented within this year’s first half.