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Sep 14, 2009
Govt acts to cool market
By Joyce Teo
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Marbhro Tan says 'It's red hot.' New home sales in Singapore have shot through the roof recently. Resale prices of many popular projects have also risen from the lows early this year. -- ST PHOTO: ALPHONSUS CHERN
THE Government has introduced new measures to prevent the fast-rising private property market from overheating.
It is removing the interest absorption scheme, which allows buyers to defer the bulk of their purchase price until the property is ready for occupation, with immediate effect. Only those uncompleted private projects where the units have already been offered for sale under this scheme can continue to do so.
It is also taking away the interest-only housing loans. These two schemes are forms of housing loans that entirely eliminate or substantially lower regular instalment payments for property purchasers in the first few years before the properties are completed.
They could thus encourage property speculation in a buoyant market where prices are rising rapidly, said the Government in a joint release on Monday.
The removal of both schemes comes into immediate effect.
As well, it will reinstate the confirmed list of land sales for the first half of next year. Under this method of sales, sites are put out for tender according to a pre-determined schedule, regardless of developer's interest.
National Development Minister Mah Bow Tan has twice hinted at bringing back the confirmed list. Because recent land tenders have attracted overwhelming response from developers, market watchers have been expecting the Government to introduce more land supply via the confirmed list.
Now that the market is experiencing strong demand, the Government also said it will not extend the Budget assistance measures introduced earlier this year, when they expire. These include allowing developers to extend their project completion period by one year without having to pay an extension premium.
Responding to questions from MPs in Parliament, Mr Mah said the Government has been monitoring the property market very closely.
'It is in everyone's interest to have a steady property market where prices move stably in line with economic fundamentals. If excessive speculation develops and a property bubble forms, eventually a severe correction must take place,' said Mr Mah.
'This will have serious consequences for the economy, for the property market and for property owners. We are currently seeing signs of heightened speculative activity, although the level of speculation is not yet extreme.'
Demand for uncompleted private housing units has picked up strongly since February, and the proportion of buyers sub-selling their units has increased.
Developers sold 10,000 units in the first seven months of this year, more than the 4,300 units sold for the whole of 2008.
At this take-up rate, the total sales for 2009 may well exceed the historical high of 14,800 units in 2007, Mr Mah warned.
'Prices for some projects are also increasing in tandem with the strong demand. Based on the caveats lodged for property transactions, overall private housing prices have started to increase significantly since June,' he told the House.
Low interest rates have also spurred home buyers, encouraged by a steady rise in the volume of bank lending for housing loans.
'These low interest rates have reduced the cost of property financing and if unchecked, this trend can lead to a rising spiral of demand and prices as more and more property buyers and speculators are drawn into the market,' said Mr Mah.�'Property prices can potentially build up a strong rising momentum under these conditions.'
Latest comments
there is no way to control the market
parliament can't legislate developers not to bill progress payment till TOP for the property - so buyers will not need to pay anything except the down payment, till TOP then the loan will kick in with its installment repayment
Posted by: imubimub at Mon Sep 14 19:40:32 SGT 2009
It's great to know the govt. is finally well-aware of the private property situation and doing something to prevent it from getting out of hand.
But as what <longenus> has mentioned above, 80% of Singaporeans are staying in HDB. Can govt. also do something about the high valuation and COV of resale flats.
You can read about the current plight of increasing number of Singaporeans who are unable to afford a HDB now:
http://www.thepetitionsite.com/1/low...r-singaporeans
Posted by: HomelessSing at Mon Sep 14 18:28:01 SGT 2009
The government is 3 months late. There should have been barometers in place to measure this sort of speculation to prevent the biggest sub-prime srew up in the history of mankind from happening again!
Whatever it is, it is good to see something in place although there is not confirmation as in how effective these measures are. The correction will be take much longer than the inflation that happened in the past few months unfortunately. In the meantime, condos will still be flipping like Free Willy.
I hope that there will be measures in place to curb COV so that HDB is again affordable to the ones who need it most noting that there are more Singaporeans staying in public housing than private properties. HDB needs to bear in mind that although it needs to provide a home for the FTs and PRs, we Singaporeans have no where else to go because this is our home.
Posted by: longenus at Mon Sep 14 17:47:49 SGT 2009
At what price NTUC launch their new property?
This government is committed to control property price?
Cannot treat houses like cars; demand and supply don't work here.
People are very unhappy now.
Posted by: Greatestasia at Mon Sep 14 17:30:00 SGT 2009
Ha ha ha!
I thought PAP government is obseesed with property speculation?
The PAP is playing with their luck by allowing international speculators to speculate property in Singapore. By confining 85% of the population in HDB flats and allowing 20% of the elites classes to speculate property; it is equivalent to digging their own grave.
Many Singaporean have to compete with FTs to buy house, and many singles can't affort to buy now.
Coupling with political and potential racial problem in the North...
Ha ha ha!
Posted by: Greatestasia at Mon Sep 14 17:24:55 SGT 2009
Sep 14, 2009
Govt acts to cool market
By Joyce Teo
<a href="http://tinypic.com" target="_blank"><img src="http://i32.tinypic.com/4iiw7d.jpg" border="0" alt="Image and video hosting by TinyPic"></a>
Marbhro Tan says 'It's red hot.' New home sales in Singapore have shot through the roof recently. Resale prices of many popular projects have also risen from the lows early this year. -- ST PHOTO: ALPHONSUS CHERN
THE Government has introduced new measures to prevent the fast-rising private property market from overheating.
It is removing the interest absorption scheme, which allows buyers to defer the bulk of their purchase price until the property is ready for occupation, with immediate effect. Only those uncompleted private projects where the units have already been offered for sale under this scheme can continue to do so.
It is also taking away the interest-only housing loans. These two schemes are forms of housing loans that entirely eliminate or substantially lower regular instalment payments for property purchasers in the first few years before the properties are completed.
They could thus encourage property speculation in a buoyant market where prices are rising rapidly, said the Government in a joint release on Monday.
The removal of both schemes comes into immediate effect.
As well, it will reinstate the confirmed list of land sales for the first half of next year. Under this method of sales, sites are put out for tender according to a pre-determined schedule, regardless of developer's interest.
National Development Minister Mah Bow Tan has twice hinted at bringing back the confirmed list. Because recent land tenders have attracted overwhelming response from developers, market watchers have been expecting the Government to introduce more land supply via the confirmed list.
Now that the market is experiencing strong demand, the Government also said it will not extend the Budget assistance measures introduced earlier this year, when they expire. These include allowing developers to extend their project completion period by one year without having to pay an extension premium.
Responding to questions from MPs in Parliament, Mr Mah said the Government has been monitoring the property market very closely.
'It is in everyone's interest to have a steady property market where prices move stably in line with economic fundamentals. If excessive speculation develops and a property bubble forms, eventually a severe correction must take place,' said Mr Mah.
'This will have serious consequences for the economy, for the property market and for property owners. We are currently seeing signs of heightened speculative activity, although the level of speculation is not yet extreme.'
Demand for uncompleted private housing units has picked up strongly since February, and the proportion of buyers sub-selling their units has increased.
Developers sold 10,000 units in the first seven months of this year, more than the 4,300 units sold for the whole of 2008.
At this take-up rate, the total sales for 2009 may well exceed the historical high of 14,800 units in 2007, Mr Mah warned.
'Prices for some projects are also increasing in tandem with the strong demand. Based on the caveats lodged for property transactions, overall private housing prices have started to increase significantly since June,' he told the House.
Low interest rates have also spurred home buyers, encouraged by a steady rise in the volume of bank lending for housing loans.
'These low interest rates have reduced the cost of property financing and if unchecked, this trend can lead to a rising spiral of demand and prices as more and more property buyers and speculators are drawn into the market,' said Mr Mah.�'Property prices can potentially build up a strong rising momentum under these conditions.'
Latest comments
there is no way to control the market
parliament can't legislate developers not to bill progress payment till TOP for the property - so buyers will not need to pay anything except the down payment, till TOP then the loan will kick in with its installment repayment
Posted by: imubimub at Mon Sep 14 19:40:32 SGT 2009
It's great to know the govt. is finally well-aware of the private property situation and doing something to prevent it from getting out of hand.
But as what <longenus> has mentioned above, 80% of Singaporeans are staying in HDB. Can govt. also do something about the high valuation and COV of resale flats.
You can read about the current plight of increasing number of Singaporeans who are unable to afford a HDB now:
http://www.thepetitionsite.com/1/low...r-singaporeans
Posted by: HomelessSing at Mon Sep 14 18:28:01 SGT 2009
The government is 3 months late. There should have been barometers in place to measure this sort of speculation to prevent the biggest sub-prime srew up in the history of mankind from happening again!
Whatever it is, it is good to see something in place although there is not confirmation as in how effective these measures are. The correction will be take much longer than the inflation that happened in the past few months unfortunately. In the meantime, condos will still be flipping like Free Willy.
I hope that there will be measures in place to curb COV so that HDB is again affordable to the ones who need it most noting that there are more Singaporeans staying in public housing than private properties. HDB needs to bear in mind that although it needs to provide a home for the FTs and PRs, we Singaporeans have no where else to go because this is our home.
Posted by: longenus at Mon Sep 14 17:47:49 SGT 2009
At what price NTUC launch their new property?
This government is committed to control property price?
Cannot treat houses like cars; demand and supply don't work here.
People are very unhappy now.
Posted by: Greatestasia at Mon Sep 14 17:30:00 SGT 2009
Ha ha ha!
I thought PAP government is obseesed with property speculation?
The PAP is playing with their luck by allowing international speculators to speculate property in Singapore. By confining 85% of the population in HDB flats and allowing 20% of the elites classes to speculate property; it is equivalent to digging their own grave.
Many Singaporean have to compete with FTs to buy house, and many singles can't affort to buy now.
Coupling with political and potential racial problem in the North...
Ha ha ha!
Posted by: Greatestasia at Mon Sep 14 17:24:55 SGT 2009
