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Foreigners, firms now form 7% of home buyers

Figure down from 20% last year; market moving to 'more stable path'

Published on Jul 11, 2012

By YASMINE YAHYA


COOLING measures have slashed the proportion of private homes bought by foreigners and companies and largely driven speculators out of the market.

National Development Minister Khaw Boon Wan stated that foreigners and firms account for just 7 per cent of total private home purchases now.

This is a striking drop from last year when the proportion was 20 per cent.

The minister, who gave a written response to a question from Nominated MP Tan Su Shan, also noted that 'the market is moving towards a more stable and more sustainable path'.

But Mr Khaw did not rule out further measures, saying: 'We continue to monitor the market closely, and remain ready to revise and enhance the policy, if ... the situation demands it.'

He said the ramp-up of public and private housing supply and the cooling measures have yielded encouraging results.

The latest cooling measure included the additional buyer's stamp duty introduced in December, which imposed an extra 10 per cent stamp duty on foreign and corporate home purchases.

Mr Khaw said the various moves 'have helped home buyers, including those at the middle and low end of the market'.

The growth of mass market home prices slowed to 0.4 per cent in the second quarter this year, compared with 1.1 per cent in the previous quarter.

Overall, private home prices also moderated significantly, up just 0.3 per cent in the first six months of the year. Last year they rose 6 per cent.

The relatively low volume of sub-sales indicates that short-term property speculation has also plunged.

In another helpful move for home buyers, a significant increase in new HDB flats means most first-timers now have a chance to select a build-to-order flat if they apply.

While Mr Ku Swee Yong, chief executive of International Property Advisor, noted that the proportion of foreigner and company purchases have fallen significantly, he said that local demand has surged in areas such as West Coast, Hillview and Punggol.

More locals buying could be another factor for the fall in the proportion of private homes bought by foreigners, Mr Ku said.

Citi economist Kit Wei Zheng reckoned that 'the sales volume and prices continued to climb in the second quarter, so we can't say there will definitely be no more (cooling) measures, but I believe any additional measures will not be as aggressive... barring a very sharp rise in prices'.

In a separate question, Ms Tan asked how the National Development Ministry would address potential conflicts that could arise from its dual role in land sales and public housing.

Mr Khaw said that there are no conflicts, as the Urban Redevelopment Authority (URA) and the Housing Board are merely agents when carrying out land sales for the state. 'Revenue accrues to the past reserves, not to the National Development Ministry, the URA or HDB,' he stated.

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