Khaw: Property Market Moving Towards A More Sustainable Path

Mr Khaw said that the Singapore property market has shown indications that it’s moving towards a more sustainable path, as he responded to questions on whether the government’s various cooling measures have achieved their intended results.

Mr Khaw repeated  that private home prices recorded  an insignificant decline in the first quarter of this year (0.1 per cent fall quarter-on-quarter), following nine consecutive quarters of moderating price increases.

He further stated that the said decline can be attributed partly to the intervention, which includes five rounds of cooling measures over the past two years, the most recent of which were imposed in December aiming at foreign-investment demand.

The force of those moves could be observed in the quick decline of the proportion of housing sub-sales — a proxy indicator of speculative activity — to about 4 per cent, while the percentage of foreign buyers for private homes has dropped “sharply” to 7 per cent.  Mr Khaw further revealed. However he fails to mention  the time frame or original quantums next to which he made the comparisons.

With regards to public housing market, it  has provided  first-timers much advantage as the latter are now given a chance to choose a Build-To-Order flat in the event that they will apply for the same.

HDB resale prices have become more reasonable, increasing by 0.6 per cent in the first quarter of 2012, so far, the smallest price growth in recent years.

MP for Holland-Bukit Timah GRC, Liang Eng Hwa, asked Mr Khaw on how will the government do to  pace out the supplies of land sales.

“The minister mentioned about some supplies coming in and so on to cool the market. I’d like to ask how the government plans to pace out the supplies of land sales so that while we meet immediate demand, we will not… in the next three to five years, have an oversupply situation, especially in the scenario when there could be an economic slowdown,” asked Mr Liang.

Mr Khaw replied: “The member’s concern about potential oversupply if we are not careful is something I think we all ought to be mindful of, because cycles sometimes get a little bit too exuberant and then when they crash, they can create other kinds of problems.

“That’s why we continue to be very vigilant and monitor closely the situation. Clearly, the market is heading towards a soft landing but we have not landed yet. So, stay seated with your buckle on.”