Govt keeping an eye on home prices

From the Straits Times, June 17, 2007

By Nur Dianah Suhaimi

“PEOPLE panicking that they may have missed the boat in the surging property market had some reassurance from the Government yesterday.

Minister for National Development Mah Bow Tan said the housing sector was being closely monitored to ensure there was sufficient supply and if demand went up, new housing sites would be released.

Asking Singaporeans not to panic, he said there was sufficient supply of housing in the next two to four years.

‘Don’t feel that you have missed the boat because there are quite a lot of boats coming along,’ he said.

Home prices shot up by 10 per cent last year and are expected to rise by another 12 per cent this year.

Analysts see the Government’s release of 15 new sites for development last Thursday as a move to cool down the market.

The release brings the total number of residential sites on sale in the second half of this year to 41. This is the largest number since 1997.

Asked about the land release, Mr Mah said that since the take-up rate for new buildings had been ‘very strong’ in the past year, the Government decided to release more development land.

But he also said that it was important that the Government struck a balance, as an oversupply or shortage was undesirable.

‘It is very important for us to make sure that the prices do not overshoot or race ahead of the real growth in the economy.

‘I think it is not sustainable in the long run and, of course, it is also not good for our competitiveness if prices and rentals go up too fast.’

The minister said there was also no danger that the heat from the private property market would filter down to HDB public housing.

Referring to the record sale prices fetched by two five-room HDB units last week, he said they were exceptional cases because of their good locations and views.

‘The broader market is really quite steady. There is an increase but this increase is in line with the increase in the strength of the economy. I’m quite comfortable with the pricing in the broader market at the moment.’

He added that the sheer number and variety of HDB flats up for sale also helped to keep prices stable and there was no need for buyers to feel that they were being priced out of the market.

‘If you can’t buy an executive flat, buy a five-room. If you can’t afford central area, go to the suburbs. If you can’t afford Tampines, go to Woodlands or Yishun,’ he said.

Asked why most of the residential sites released on Thursday are mostly in the suburbs, such as Bishan and Sembawang, Mr Mah said the central areas were not a worry as collective sales will release new developments in these areas.

While ‘it’s not the Government’s job to add more supply in these areas’, he said it was important for the Government to ensure there was sufficient supply of housing in the suburbs.

‘I’m not talking about the multimillion-dollar apartments in the central area. I think those people can take care of themselves.’

ndianah@sph.com.sg

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