http://www.straitstimes.com/archive/...inues-20141230
'Good' if resale price slide continues
Published on Dec 30, 2014 1:02 AM
THIS year's slow slide in public resale flat prices is what National Development Minister Khaw Boon Wan hopes to see in 2015 too.
"If what we observe this year continues into next year, I would consider that a very good development," he told reporters yesterday morning.
Asked if a double-digit fall in Housing Board resale prices is expected, he replied: "I hope not."
Drastic price falls are "seldom good" and usually due to external events such as financial crises, he said. Single-digit changes are easier for people to accept.
Experts expect HDB resale prices to have fallen by under 8 per cent for the whole of this year.
Their predictions for 2015 range from stagnation to a further drop of 5 per cent to 8 per cent for the full year.
The subdued resale market is the result of a ramped-up supply of new flats from 2011 to 2013, as well as cooling measures such as loan curbs and stamp duties.
Asked if cooling measures will be relaxed, as developers have called for, Mr Khaw replied that some of the measures are temporary and will be adjusted when the market is cool enough.
"The question is, when do you do that and how do you do that. So those are obvious issues of consideration next year."
But measures related to financial prudence are permanent and should be preserved, he added.
These include the Total Debt Servicing Ratio (TDSR) framework, which puts a 60 per cent cap on the proportion of salary that goes towards servicing debts, and restrictions on loan tenure.
"Those are parameters that (the Monetary Authority of Singapore) sets, and those parameters you can calibrate as you go along. But the framework, I think, is the right framework," said Mr Khaw.
This stance is in line with the market's expectations that the TDSR is here to stay, said R'ST Research director Ong Kah Seng.
Chris International director Chris Koh noted that, if prices keep falling, next June will mark two years of decline.
"If the total decline is substantial, it would be timely to tweak some of the measures," he said.
JANICE HENG