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03-04-2011, 07:59 AM
Apr 3, 2011
Property cooling steps working: Mah
Hopefully, the market will see a soft landing, says National Development Minister
By Huang Lijie
The recent housing price estimates by government agencies suggest that its property cooling measures are moving in the right direction.
National Development Minister Mah Bow Tan yesterday called the estimates 'quite encouraging' as they reflect moderation of price rises for both the public housing and private property markets.
He added that the Government is also starting to see a reduction in the volume of transactions and a continuing downward trend in cash-over-valuation (COV), or the median cash premium paid for a resale flat on top of its valuation.
He said that COV went from about $30,000 in the third quarter of last year to about $23,000 in the fourth quarter. And in the first quarter of this year, it was between $20,000 and $21,000.
He said: 'Hopefully, we will have a soft landing for prices. As I have said many times, we are not trying to crash the market. We are trying to achieve a soft landing for the market in keeping with the current economic fundamentals. That's beginning to happen.'
The estimates, released last Friday, showed that resale Housing Board (HDB) prices rose 1.6 per cent in the first quarter of the year compared to the previous quarter. This is the lowest quarterly increase since the second quarter of 2009.
Private property prices also rose a slower 2.1 per cent, compared to the previous quarter's 2.7 per cent increase. It is the sixth consecutive quarter of moderation in price growth for private homes.
Mr Mah added that he expects to see the full impact of the market cooling measures - the last of which was implemented in January - in another few months.
The new measures included lowering the amount banks can lend on a second mortgage from 70 per cent to 60 per cent of the home's value.
He was speaking on the sidelines of the completion ceremony for Parc Lumiere, the condo-style public flats built under the Housing Board's Design, Build and Sell Scheme.
Mr Mah also addressed the issue of how sky-high prices of mass-market private homes are putting pressure on flat owners to upgrade instead to Housing Board resale flats.
He said that with an increased supply of mass-market private homes being rolled out, including 33,000 private property units that have yet to be sold, he expects prices for these homes to moderate further.
He added that there may even be a slight oversupply in the housing landscape two to three years down the road. But the situation will be monitored carefully and government land sales adjusted to calibrate supply.
He reassured first-time flat buyers too that with a record number of 22,000 units planned for launch under the Housing Board's build-to-order scheme this year, there should be enough flats to meet demand.
He said there will be at least 10 build-to-order launches, each with about 70 blocks of flats, for the next two months.
'And beyond May, if the demand is still strong, we still have a lot of supply that is able to be pushed out.'
lijie@sph.com.sg
Property cooling steps working: Mah
Hopefully, the market will see a soft landing, says National Development Minister
By Huang Lijie
The recent housing price estimates by government agencies suggest that its property cooling measures are moving in the right direction.
National Development Minister Mah Bow Tan yesterday called the estimates 'quite encouraging' as they reflect moderation of price rises for both the public housing and private property markets.
He added that the Government is also starting to see a reduction in the volume of transactions and a continuing downward trend in cash-over-valuation (COV), or the median cash premium paid for a resale flat on top of its valuation.
He said that COV went from about $30,000 in the third quarter of last year to about $23,000 in the fourth quarter. And in the first quarter of this year, it was between $20,000 and $21,000.
He said: 'Hopefully, we will have a soft landing for prices. As I have said many times, we are not trying to crash the market. We are trying to achieve a soft landing for the market in keeping with the current economic fundamentals. That's beginning to happen.'
The estimates, released last Friday, showed that resale Housing Board (HDB) prices rose 1.6 per cent in the first quarter of the year compared to the previous quarter. This is the lowest quarterly increase since the second quarter of 2009.
Private property prices also rose a slower 2.1 per cent, compared to the previous quarter's 2.7 per cent increase. It is the sixth consecutive quarter of moderation in price growth for private homes.
Mr Mah added that he expects to see the full impact of the market cooling measures - the last of which was implemented in January - in another few months.
The new measures included lowering the amount banks can lend on a second mortgage from 70 per cent to 60 per cent of the home's value.
He was speaking on the sidelines of the completion ceremony for Parc Lumiere, the condo-style public flats built under the Housing Board's Design, Build and Sell Scheme.
Mr Mah also addressed the issue of how sky-high prices of mass-market private homes are putting pressure on flat owners to upgrade instead to Housing Board resale flats.
He said that with an increased supply of mass-market private homes being rolled out, including 33,000 private property units that have yet to be sold, he expects prices for these homes to moderate further.
He added that there may even be a slight oversupply in the housing landscape two to three years down the road. But the situation will be monitored carefully and government land sales adjusted to calibrate supply.
He reassured first-time flat buyers too that with a record number of 22,000 units planned for launch under the Housing Board's build-to-order scheme this year, there should be enough flats to meet demand.
He said there will be at least 10 build-to-order launches, each with about 70 blocks of flats, for the next two months.
'And beyond May, if the demand is still strong, we still have a lot of supply that is able to be pushed out.'
lijie@sph.com.sg
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