princess_morbucks
15-11-13, 14:28
http://mypaper.sg/news/time-ease-property-cooling-measures-20131115
THE cooling measures are giving the property market the shivers.
Private-home resale transactions have dipped, dropping 57 per cent in the third quarter to 1,478 units, compared to a year ago.
Even resale prices are weak, falling 1.6 per cent in September from August for non-landed private homes.
Foreigners are staying on the sidelines.
On Tuesday National Development Minister Khaw Boon Wan said the proportion of private homes bought by foreigners fell from 17 per cent in 2011 to 7 per cent in the third quarter of this year.
More corrections may follow. Some economists predicted that home prices could fall as much as 30 per cent in 2015 and 2016, due to higher interest rates and a jump in housing supply expected then, The Business Times reported on Wednesday.
Property experts say this shows that the property curbs have worked. The question is whether they have worked too well and is it time for the restrictions to be eased.
To ward off a potential property bubble, the Government has slapped stamp duties and introduced steps to ensure that homebuyers are borrowing within their means.
Mr Eugene Lim, ERA's key executive officer, said there is "a need to review or tweak some measures to ensure the resale market remains stable".
He said the measures should not hurt "marginalised groups" like upgraders who are not buying for investment but to fulfil their desire for a better lifestyle.
Mr Alan Cheong, head of research and consultancy at Savills Singapore, said that the measures in place could crimp investor demand and result in not enough homes to meet rental needs of singles and smaller families as the population grows. This could lead to rents going up.
"Purely from this aspect, some measures should be lifted or toned down," he said.
Mr Khaw also said he is "seeing more (light) at the end of the tunnel" when it comes to achieving a sustainable property market here but noted that "we're still in the tunnel".
For Mr Nicholas Mak, head of research and consultancy at SLP International, this means the Government might not be ready to lift the property curbs.
In fact, he and other experts believe lifting the measures now could backfire.
Mr Mak said that demand in some segments is still strong: "Judging by the buying frenzy we still see at some showflats, if the Government removes the measures now, we will be back to a lot of buying and borrowing again."
CIMB regional economist Song Seng Wun said the factors - such as low interest rates - contributing to a property bubble still remain. So, removing the restrictions would result in the same or higher level of property speculation as before.
But looking at the large supply of homes set to hit the market between 2015 and 2017, and the possibility of interest rates rising, DWG executive director Andy Choa said it would be "a no-brainer" for the Government to consider easing some curbs.
In the meantime, home sales are expected to still be slow next year, said Ms Lee Lay Keng, head of Singapore research at DTZ, as the cooling measures work through the market.
"Developers will have to price their projects more competitively to realise sales," she said.
THE cooling measures are giving the property market the shivers.
Private-home resale transactions have dipped, dropping 57 per cent in the third quarter to 1,478 units, compared to a year ago.
Even resale prices are weak, falling 1.6 per cent in September from August for non-landed private homes.
Foreigners are staying on the sidelines.
On Tuesday National Development Minister Khaw Boon Wan said the proportion of private homes bought by foreigners fell from 17 per cent in 2011 to 7 per cent in the third quarter of this year.
More corrections may follow. Some economists predicted that home prices could fall as much as 30 per cent in 2015 and 2016, due to higher interest rates and a jump in housing supply expected then, The Business Times reported on Wednesday.
Property experts say this shows that the property curbs have worked. The question is whether they have worked too well and is it time for the restrictions to be eased.
To ward off a potential property bubble, the Government has slapped stamp duties and introduced steps to ensure that homebuyers are borrowing within their means.
Mr Eugene Lim, ERA's key executive officer, said there is "a need to review or tweak some measures to ensure the resale market remains stable".
He said the measures should not hurt "marginalised groups" like upgraders who are not buying for investment but to fulfil their desire for a better lifestyle.
Mr Alan Cheong, head of research and consultancy at Savills Singapore, said that the measures in place could crimp investor demand and result in not enough homes to meet rental needs of singles and smaller families as the population grows. This could lead to rents going up.
"Purely from this aspect, some measures should be lifted or toned down," he said.
Mr Khaw also said he is "seeing more (light) at the end of the tunnel" when it comes to achieving a sustainable property market here but noted that "we're still in the tunnel".
For Mr Nicholas Mak, head of research and consultancy at SLP International, this means the Government might not be ready to lift the property curbs.
In fact, he and other experts believe lifting the measures now could backfire.
Mr Mak said that demand in some segments is still strong: "Judging by the buying frenzy we still see at some showflats, if the Government removes the measures now, we will be back to a lot of buying and borrowing again."
CIMB regional economist Song Seng Wun said the factors - such as low interest rates - contributing to a property bubble still remain. So, removing the restrictions would result in the same or higher level of property speculation as before.
But looking at the large supply of homes set to hit the market between 2015 and 2017, and the possibility of interest rates rising, DWG executive director Andy Choa said it would be "a no-brainer" for the Government to consider easing some curbs.
In the meantime, home sales are expected to still be slow next year, said Ms Lee Lay Keng, head of Singapore research at DTZ, as the cooling measures work through the market.
"Developers will have to price their projects more competitively to realise sales," she said.