Singapore’s property cooling measures will stay and the government will continue to release more land sites to meet private housing demand, said National Development Minister Khaw Boon Wan.
In his speech to parliament yesterday, Mr Khaw said private housing currently makes up 23 percent of the country’s housing market. He noted that besides housing permanent residents (PRs) and foreigners, it will fulfil the upgrading aspirations of higher-income Singaporeans.
The Urban Redevelopment Authority (URA) “will continue to release land parcels to meet the demand,” he said. “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.”
According to the URA’s latest flash estimates, the private home price index has moderated for eight consecutive quarters, with a 1.3 percent quarter-on-quarter increase recorded in Q3, the slowest increase over the past two years.
“We will continue to monitor market conditions closely, and if need be, we will take further measures.”
The government implemented a series of cooling measures between September 2009 and January 2011 to cool the housing market.
Meanwhile, Regina Lim, an analyst at Standard Chartered Bank, does not believe that another set of 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, she argued that it is not time to remove the existing property measures because interest rates are still low.
“Interest rates of about one percent on home mortgages, for a country with five percent 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 percent, we still need the cooling measures,” she said.
Lim predicts that the supply of private housing land released under the confirmed list of the Government Land Sales (GLS) programme will ease up, perhaps between 3,000 and 4,000 private homes, including executive condominiums.
“This would have made up sufficiently for the undersupply in the past 10 years,” she said.
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