The government is aiming for a “soft landing” for the housing market, said National Development Minister Khaw Boon Wan during the Committee of Supply debate in parliament on Tuesday, revealed media reports.
In outlining his ministry’s plans for the year, Mr Khaw noted that government efforts to tame the housing market have yielded results. In fact, HDB resale prices fell 37 percent above the 2009 level, while median household income climbed 38 percent.
However, some MPs cautioned that efforts to rein in home prices should not be overdone.
To this, Mr Khaw replied: “We want a soft landing for our housing market because a market crash benefits no one.
“Ms Foo Mee Har said that we should not go into overdrive, and unwittingly undermine the retirement plan of our seniors who look to their housing assets for monetisation. I agree, that is why we have substantially reduced the supply of new flats.
“Ms Foo and Er Lee Bee Wah suggested that we adjust the Additional Buyer’s Stamp Duty, especially for Singaporean buyers, when we are ready to unwind the cooling measures. I have also heard Dr Lily Neo’s very thoughtful words of caution.
“Indeed, we should not overkill. The property market is in transition and it is a time that calls for vigilance and nimbleness. We will be careful.”
With new flats substantially subsidised, the Minister shared that those purchasing flats directly from the housing board benefit even more. Compared to the hike in median household income, he noted that with grants, prices of Build-to-Order (BTO) flats within non-mature estates increased by six percent.
In 2014, Singaporeans booked around 20,000 BTO flats. 89 percent of five-room flats were sold under $450,000, 81 percent of four-room flats were sold below $350,000, while 90 percent of three-room flats were sold under $250,000.
Based on a survey, the figures were all within the amount that respondents said they were willing to pay for a flat, said Mr Khaw.
“I would like BTO prices to be within four years of an applicant’s annual salary. But this assumes that BTO applicants will be prudent in their choice of housing,” he shared.
Romesh Navaratnarajah, Singapore Editor at PropertyGuru, edited this story. To contact him about this or other stories email romesh@propertyguru.com.sg
