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28-11-2010, 06:49 AM
Really?? 
Nov 28, 2010
Steps to cool property market working: Mah
But minister says situation being closely watched, promises more action if needed
By Elgin Toh
Signs are emerging in the public and private housing markets that the Government's three-month- old price stabilisation measures are working, says National Development Minister Mah Bow Tan.
The effect is more pronounced in the resale Housing Board market, where median cash over valuation (COV) payments in October fell to $25,000, from $30,000 in the previous quarter, Mr Mah said yesterday.
And COV numbers for November transactions so far indicate a further decrease, he added. COV, which is the cash premium paid by a buyer over and above the valuation of a flat, is one measure of how hot the demand for HDB resale homes is.
Transactions in the HDB market have fallen by 30 per cent in the fourth quarter thus far, against the previous quarter.
In the private property market, prices are still rising but the increases have moderated, Mr Mah pointed out.
Last month, the Urban Redevelopment Authority announced that private residential prices rose 2.9 per cent in the third quarter of this year. This represented a step-down from the previous quarter, when prices jumped 5.3 per cent.
'So, all in all, I would say the cooling measures are starting to take effect, but the overall impact is still too early to tell,' he said.
Mr Mah was speaking to reporters on the sidelines of a groundbreaking event for new HDB flats in the Dawson estate.
The Government announced a slew of measures on Aug 30 to rein in record-high prices in the housing market. These included lower bank loan limits for second properties and tighter ownership rules for buyers of HDB flats.
Yesterday, the minister, who has had to face criticism from opposition parties on the housing affordability issue, said the steps taken have achieved the desired effect of discouraging potential HDB flat buyers not in urgent need of housing, including those who already own private property.
A less feverish market will make it easier for more first-time buyers to purchase resale flats, he said.
However, Mr Mah was also quick to flag a few concerns.
Low interest rates and an abundance of investor liquidity elsewhere, for example, could yet push real estate prices back up.
Furthermore, anti-speculation measures in property markets like Hong Kong, Taiwan, mainland China and South Korea - some more restrictive than the ones here - may result in a 'diversion of funds into Singapore'.
In view of this, the Government will introduce more measures to curb property prices if there is a need to, said Mr Mah.
But he stressed that the Aug 30 measures had just been implemented, so the Government would simply continue monitoring the market for now.
'We're watching it constantly, watching it like a hawk, let me assure you,' he said.
Yesterday, Mr Mah also reiterated the Government's overall policy on handling housing prices.
Its approach, he said, was to pre-empt the growth of bubbles by deflating them slowly, rather than bursting them suddenly. He likened the calibrated steps by the Government to tapping on the brakes of a car.
'If we slam on the brakes all at once, then people may get thrown out of the window, people may get hurt, and worse still, the engine may stall,' he said.
The current approach differs from 1996's more drastic measures - including a capital gains tax - that caused the market to crash.
He added that the Government's goal was not to avoid price increases entirely, but to make sure that property market prices do not outstrip economic fundamentals.
Real estate agents contacted yesterday said the overall declines in COV and HDB flat transactions mentioned by the minister echoed what they have been seeing in the deals they have been involved in.
But they also said that private housing was unlikely to become cheaper any time soon.
Mr Eugene Lim, associate director of ERA Asia Pacific, said: 'The cost of financing remains cheap, and the strong currency is also attracting foreigners. While the Government is doing a lot to moderate the private property market, I don't expect prices to dip unless there's a recession.'
And despite the cooling, at least one potential first-time HDB buyer is still adopting a wait-and-see attitude.
Engineer Darren Lim, 27, who lives with his parents, said: 'COV may have fallen, but the total sale price is still too high. I will enter the market if COV falls by another $10,000.'
elgintoh@sph.com.sg
Nov 28, 2010
Steps to cool property market working: Mah
But minister says situation being closely watched, promises more action if needed
By Elgin Toh
Signs are emerging in the public and private housing markets that the Government's three-month- old price stabilisation measures are working, says National Development Minister Mah Bow Tan.
The effect is more pronounced in the resale Housing Board market, where median cash over valuation (COV) payments in October fell to $25,000, from $30,000 in the previous quarter, Mr Mah said yesterday.
And COV numbers for November transactions so far indicate a further decrease, he added. COV, which is the cash premium paid by a buyer over and above the valuation of a flat, is one measure of how hot the demand for HDB resale homes is.
Transactions in the HDB market have fallen by 30 per cent in the fourth quarter thus far, against the previous quarter.
In the private property market, prices are still rising but the increases have moderated, Mr Mah pointed out.
Last month, the Urban Redevelopment Authority announced that private residential prices rose 2.9 per cent in the third quarter of this year. This represented a step-down from the previous quarter, when prices jumped 5.3 per cent.
'So, all in all, I would say the cooling measures are starting to take effect, but the overall impact is still too early to tell,' he said.
Mr Mah was speaking to reporters on the sidelines of a groundbreaking event for new HDB flats in the Dawson estate.
The Government announced a slew of measures on Aug 30 to rein in record-high prices in the housing market. These included lower bank loan limits for second properties and tighter ownership rules for buyers of HDB flats.
Yesterday, the minister, who has had to face criticism from opposition parties on the housing affordability issue, said the steps taken have achieved the desired effect of discouraging potential HDB flat buyers not in urgent need of housing, including those who already own private property.
A less feverish market will make it easier for more first-time buyers to purchase resale flats, he said.
However, Mr Mah was also quick to flag a few concerns.
Low interest rates and an abundance of investor liquidity elsewhere, for example, could yet push real estate prices back up.
Furthermore, anti-speculation measures in property markets like Hong Kong, Taiwan, mainland China and South Korea - some more restrictive than the ones here - may result in a 'diversion of funds into Singapore'.
In view of this, the Government will introduce more measures to curb property prices if there is a need to, said Mr Mah.
But he stressed that the Aug 30 measures had just been implemented, so the Government would simply continue monitoring the market for now.
'We're watching it constantly, watching it like a hawk, let me assure you,' he said.
Yesterday, Mr Mah also reiterated the Government's overall policy on handling housing prices.
Its approach, he said, was to pre-empt the growth of bubbles by deflating them slowly, rather than bursting them suddenly. He likened the calibrated steps by the Government to tapping on the brakes of a car.
'If we slam on the brakes all at once, then people may get thrown out of the window, people may get hurt, and worse still, the engine may stall,' he said.
The current approach differs from 1996's more drastic measures - including a capital gains tax - that caused the market to crash.
He added that the Government's goal was not to avoid price increases entirely, but to make sure that property market prices do not outstrip economic fundamentals.
Real estate agents contacted yesterday said the overall declines in COV and HDB flat transactions mentioned by the minister echoed what they have been seeing in the deals they have been involved in.
But they also said that private housing was unlikely to become cheaper any time soon.
Mr Eugene Lim, associate director of ERA Asia Pacific, said: 'The cost of financing remains cheap, and the strong currency is also attracting foreigners. While the Government is doing a lot to moderate the private property market, I don't expect prices to dip unless there's a recession.'
And despite the cooling, at least one potential first-time HDB buyer is still adopting a wait-and-see attitude.
Engineer Darren Lim, 27, who lives with his parents, said: 'COV may have fallen, but the total sale price is still too high. I will enter the market if COV falls by another $10,000.'
elgintoh@sph.com.sg
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