Monday, July 23, 2007

Stay unscathed in property scrum

'A lot of supply' available, those who join rush will have to pay: Minister Mah

Ansley Ng
[email protected]

PROPERTY hunters should not be "spooked" by current property prices or rising rental rates, said Minister for National Development Mah Bow Tan, responding to recent reports on soaring property and rent prices.

"It's important we keep pushing out information so people don't get spooked or panic (over) one particular headline or report in the newspapers about record prices or record rental (prices)," he said at a Tampines event yesterday.

Recent reports indicated rentals for Housing and Development Board (HDB) flats have hit a 10-year high, with monthly rates soaring past $2,000. According to a Straits Times report on Saturday, the rent for a four-room HDB flat in Lavender is $2,800, while that of a four-room flat in Jurong East is $2,500.

The reports followed HDB's release of average resale prices and cash-over-valuation data on its website last week.

Experts Today spoke to said the examples highlighted in the media were "sensational" and reflected record sales, which might not give an accurate picture of the situation.

According to Cushman & Wakefield's Donald Han, sale and rent prices of properties in areas such as Woodlands, Serangoon and Yishun are still below premium levels.

Those hit by high prices are the ones who "rush" to join the property scrum, said Mr Mah. "There is actually a lot of supply available. Stand back and let the others rush. If you want to follow the crowd, you must be prepared to take higher risks.

"Why should 10 people rush for a flat when there are others around?"

The Government is monitoring the situation, he added, and within the next two to three years there will be "ample supplies" across the various categories. Home owners and those looking to rent must arm themselves with the right information and differentiate between fact and speculation, said Mr Mah.

Commenting on Wednesday's announcement to raise the development charge a tax on the appreciation of land value from 50 per cent to 70 per cent, the minister said this was not a knee-jerk reaction to cool the current en bloc frenzy.

The fee, which was lowered from 70 per cent to 50 per cent in 1985 due to an economic slump, was raised in response to the buoyant economy.

"The primary intention is to go back to fair sharing sharing of wealth and of enhancement value," he said. "The reaction so far is, it will not have a major impact on the market."