The four recent rounds of measures aimed at cooling the real estate market, announced in September 2009, February and August 2010 and January 2011, have prevented prices of private homes from spiralling out of control, said National Development Minister Mah Bow Tan.
Demand-side measures and increased supply have helped stabilise the public housing market, he added.
Based on data from the Ministry of National Development (MND), the rate of price hikes for private homes has slowed down and continued to decline since the first set of measures was announced in September 2009.
Sub-sale activity has also been controlled, with sub-sales accounting for seven percent of all private home transactions in Q4 2010, down from 13 percent in Q2 2009, when the market saw strong recovery after the financial crisis.
The level of sub-sales, or secondary market trading of properties under construction, is generally considered as an indicator of speculative activity.
How the market moves in the next few months will depend on several factors — interest rates, the state of the economy, liquidity and external factors, said Mr. Mah in Parliament.
“We will continue to keep a close eye on the market and act again if there is a need,” he said. “Some people say that our measures have added uncertainty to the market. I beg to disagree. In fact, what is certain is that the government is determined to do whatever is necessary to maintain market stability.”
MND’s move to dampen non-urgent demand for resale flats and increase the supply of new HDB flats has worked, said Mr. Mah.
The month-on-month growth in HDB resale prices dropped to 0.6 percent and 0.7 percent in January and February 2011, he said. In Q4 last year, prices of HDB resale flats jumped 2.5 percent quarter-on-quarter.
The average monthly resale volume in January and February 2011 also slid by another 16 percent, as compared to resale volumes in Q4 2010, he said.