Reviewing some of the rules would help to rein in runaway prices in the private property market
HALF-a-million dollars is a lot of money for the average young couple, but even this was not sufficient for a new five-room Design, Build and Sell flat at a recent launch. And if one aspires to a private condominium, the amount is easily doubled, resulting in a monthly loan repayment of several thousand dollars for a long time.
Along with the rising tide, prices of resale private and HDB apartments have gone up too. And new entrants hoping to get into the market via the resale route face larger cash-over-valuation demands.
Those who have a roof over their heads are at a slight advantage, as price rises may increase their ability to move if they wish. But even this is not without risk – moving up to a more expensive home could mean a steep drop should times change.
In Parliament yesterday, Minister for National Development Mah Bow Tan mentioned that we are currently seeing signs of heightened speculative activity though not extreme. The proportion of sub-sellers has increased and developers sold 10,000 units in the first seven months of this year against 4,300 for the whole of 2008. Private housing prices have also significantly increased since June.
He added that it is in everyone’s interest to have a steady property market where prices move in line with economic fundamentals. If a property bubble develops, a severe correction must take place with serious consequences for the economy and the property market. Continue reading
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