July 10, 2009 Friday

No sign of excessive speculation in private property: Mah

By Jessica Cheam

THE recent spike in private property sales is being monitored by the Government but there has been no sign of excessive speculation, said National Development Minister Mah Bow Tan yesterday.

Mr Mah said 'speculation is always part and parcel of any market'.

'Whether there's excessive speculation or not, that is something we have to look at and watch out for.

'So far, anecdotally, we don't see any. But if there is, we will take the appropriate action,' added the minister, who was speaking on the sidelines of an HDB event.

The private property market kicked back into life in February after a sluggish 2008 that saw home prices and sales volume plunge on the back of the global economic recession.

The surge in activity, primarily supported by the healthy sales of private suburban homes, has helped stem the slide in private property prices.

Recent flash figures from the Urban Redevelopment Authority show prices fell 5.9 per cent from April to last month, following a record 14.1 per cent slide in the first quarter.

Mr Mah yesterday acknowledged the spike in activity, but added that prices have come down some 25 per cent over the last two to three quarters.

'I guess some of this increase in take-up rate is due to the property prices coming down. So whether this will be sustainable, I think it's really hard to tell.'

Sustainability will depend on two factors - sentiment and fundamentals, he added.

How the public perceive the health of the local and global economy will be crucial as will various factors, such as the supply, take-up rate and transacted prices in the private market over the coming months.

As far as the Government is concerned, 'our main interest is to make sure that the property market is an efficient one', said Mr Mah.

'By that, I mean that it functions well, and prices are more or less in line with economic fundamentals.'

The Government has released information on how much supply is coming onto the market, the transacted prices and how many units have been sold on the deferred payment scheme.

This gives buyers complete information, rather than to have reports of high prices alone, he said.

'For example, there are about over 40,000 units coming onto the market in the next three or four years - I think people must know that.'

The Government is also monitoring the market and will adjust the supply through its land sales programme.

'The objective is to keep the market efficient and (to do so), you need to give timely, accurate and comprehensive information to the public,' said Mr Mah.

Additional reporting by Kate Lim