Tag Archives: National Development

Buoyant S’pore property sales spark fresh concerns

Buoyant property sales in recent months have sparked fresh concerns that another round of cooling measures may be on the cards despite the last round of measures introduced in December 2011.

Experts said the appetite for home purchases in Singapore is still strong despite several rounds of cooling measures that were introduced by the government.

In fact, property developers have been selling over 2,000 private homes every month in 2012 — well above the monthly historical average of 1,400 units.

During the last parliament sitting, National Development Minister Khaw Boon Wan told the House that the five rounds of measures implemented between September 2009 and December last year would need more time to cool the property market.

Although property sales are expected to remain above 2,000 units a month over the next few months, experts said it was unlikely that the authorities would introduce another round of cooling measures soon.

Norman Ho, a real estate partner at Rodyk & Davidson, said: “I don’t think any cooling measures should come in any further. … I don’t think (capital gains tax) should be implemented because Singapore, being an open economy, … it actually has a repercussion on the economy.

“It destabilises the economy. It just doesn’t affect the purchasing of residential property itself, but it affects the whole outlook of the economy.”

Low borrowing rates and a flush of liquidity in the market have been blamed for the buoyant property demand.

Experts said one way to curb demand is to restrict housing loans available for home buyers.

Donald Han, HSR’s special advisor, said: “To restrict the number of multiple investments per investor, one possible option would be to look into the loan-to-value ratio.

“That is, if you are looking at your first property for your own occupation, that loan quantum can be as high as 80 per cent. But once you are buying into your second and third property, that could come down to as (low) as 60 per cent or even 30 to 50 per cent.”

Nicholas Mark, research head at SLP International, said: “The problem right now in the residential property market is not the level of speculation nor high price growth.

“Prices are stabilising. In fact in some sectors, prices are declining marginally, while the level of speculation has reached a three-year low.

“The problem is actually over-investment — there is a risk there could be a bubble caused by shoebox apartments.”

Analysts said the rising supply of shoebox apartments is one of the factors that is keeping the property sector hot.

By 2015, some 9,700 shoebox apartments are projected to be ready. Eight out of ten apartments will be in the heartlands, an untested market for such apartments that is the size of four car park spaces.

Some analysts have suggested that any possible cooling measures should just be focused on this segment.

Source : CNA – 2012 May 29

Singapore’s delicate balancing act

Recently, I was invited to give a property talk at the Ministry for National Development on what the future holds for Singapore’s property market in 2012. Needless to say, I was a bit nervous on how the ministry would perceive my feedback and market outlook as the government body is responsible for formulating and implementing policies that affect the real estate sector.

Singapore is facing a conundrum – it is a favoured investment destination among high net worth individuals which has in turn pushed up property prices. Wages for Singaporeans, however, have not gone up in tandem, which has priced out some locals from getting their first leg in real estate.

It has indeed been a challenging year for the government as high property prices caused a drop in vote margin during the general election last year. Post-GE, we are now seeing a trend in an oversupply in both the private and public markets, as well as Government Land Sales (GLS) programme to ensure property prices remain sustainable.

Coupled with the various policies implemented, the concerted effort by the government has finally began to show result – the Urban Redevelopment Authority’s (URA) Private Property Index (PPI) has finally eased 0.1 per cent in the first quarter of 2012. This is expected to fall even more due to the Eurozone crisis, making it an excellent opportunity for investors to start property hunting, especially for prime properties as they will be the first to decline.

In the words of Warren Buffet, “Be fearful when others are greedy. Be greedy when others are fearful.”

Source: PropertyReport – 21 May 2012