Moves to cool property market worked: Mah

http://www.businesstimes.com.sg/sub/...60785,00.html?

Published November 24, 2009

Moves to cool property market worked: Mah

Too early to decide whether to restore two loan schemes

By EMILYN YAP


(SINGAPORE) Measures introduced by the government in September to cool the property market have had an effect, National Development Minister Mah Bow Tan told Parliament yesterday.

But more time is needed to gauge the impact of the moves and it is premature to decide whether the interest absorption scheme (IAS) and interest-only housing loans (IOL) should be resumed, he said.

After months of rising property prices and swelling sales, the government announced on Sept 14 several measures to rein in sentiment. It scrapped the IAS and IOL with immediate effect, and said it would resume Confirmed List land sales for the first half of 2010.

'These measures appear to have had some effect in tempering the exuberance in the private housing market,' Mr Mah said yesterday, citing numbers on new private home sales.

According to the Urban Redevelopment Authority, developers sold 811 units in October, down 29 per cent from 1,143 the month before. And September's volume was itself 37 per cent less than the 1,805 units sold in August.

The government aims to curb erratic price hikes arising from excessive speculation, inaccurate information or market manipulation, Mr Mah said. But ultimately, prices have to be determined by market forces, based on genuine demand from home buyers and investors.

'The government will continue to monitor the property market closely and assess the market's response to the measures introduced before deciding whether further measures are necessary,' he said.

On the IAS and IOL, Mr Mah also said the government needs time to gauge the impact of their removal. 'I won't say that we will never restore these schemes, but I think it is a bit too early to make a call,' he said.

The government has lifted anti-speculation measures in the past after the property market stabilised, he added.

Market watchers told BT yesterday it is not yet time to bring back the IAS and IOL. Chesterton Suntec International research and consultancy director Colin Tan cited a caution issued by the Monetary Authority of Singapore two weeks ago.

MAS said in its yearly Financial Stability Review that property buyers and speculators could face capital losses should growth turn out to be weaker than expected.

'Conversely, if the recovery stays on course, interest rates will eventually rise and drive up financing costs, with severe implications for those who have over-extended themselves,' MAS said.

aren't speculators investors too be it long or short term? Without investors (ie people owning mre than 1 hme-cmbinatn of pte pte or hdb pte), all those developers buying land frm gov can wait till the cows come home for 100% first time homebuyers to take up the units. I think he should define what he meant by genuine buyers coz investors are genuine buyers too

http://www.straitstimes.com/PrimeNew...ry_458183.html

Nov 24, 2009

Govt aims to cool property market, not crash it

By Jessica Cheam


MEASURES to cool the property market appear to have been successful in tempering market exuberance for private homes.

Addressing Parliament yesterday, National Development Minister Mah Bow Tan said that the latest figures from the Urban Redevelopment Authority (URA) showed sales of private homes by developers falling month-on-month by 37per cent in September and 29per cent last month.

In response to a query from MP Cynthia Phua (Aljunied GRC) on sub-sales figures, Mr Mah also highlighted that the number of sub-sales had fallen.

The minister said that the government's intention had been to 'cool the market, not crash it'.

The interest absorption scheme and interest-only loans scheme - which had allowed home buyers to defer the bulk of the cost of their home purchases - were both stopped with immediate effect in September. The Government also recently added to supply by resuming its land sales programme.

Mr Mah did not rule out restoring some of the schemes that have been suspended to temper property demand.

Responding to a question from MP Christopher de Souza (Holland-Bukit Timah GRC) about whether the measures would be temporary or permanent, he said it would take some time 'to really gauge the response and the impact of these schemes'.

In the past, the Government introduced measures to curb excessive speculation only to later restore schemes when the market stabilised or weakened, he said.

'So I won't say that we will never restore these schemes, but I think it's a little bit too early to make a call on that.'

The Government will continue to monitor the property market closely and 'assess the market's response to the measures introduced before deciding whether further measures are necessary to promote a stable and sustainable property market,' he said.

Nominated MP Paulin Tay Straughan asked if the measures could be better targeted to distinguish between genuine and speculative home buyers.

But Mr Mah said the measures were already 'rather targeted' at speculators.

'So I think we have...taken a calibrated approach to the property market. The idea is to cool the market, not to crash it. And I think this is the reason why we've been very careful in our approaches,' he said.

Mr Mah noted that there was currently plenty of home supply. The URA's latest figures show that the sites on its confirmed and reserve list can yield about 10,600 units - the highest number from any half-yearly government land sales programme since the reserve list system started in 2001.

He pointed out that there were about 35,000 units of planned private homes yet to be sold.

'So the message must be that there's a lot of supply out there (at) different prices, different locations. And I would urge Singaporeans to do their sums, but also to look around and not be rushed into buying something,' he said.