ST : Homes are for keeps, not speculation: PM

Feb 22, 2010

Homes are for keeps, not speculation: PM

Singaporeans advised not to sell their homes for a quick buck

By Rachel Chang

PRIME Minister Lee Hsien Loong yesterday urged Singaporeans to treasure their homes and not use them as an easy means to make a quick buck or settle a debt.

He disclosed that MPs have been approached by many residents who have sold their homes for cash to pay off loans or make purchases.

'They have a problem finding another home or getting a loan to buy another home...it is not easy to solve the problem,' he said, in a speech underlining the importance of treating a residential property as a long-term investment.

'Property is for people to buy to live in, not for speculating,' he said.

His remarks, in Mandarin and English, at a Chinese New Year dinner last night came two days after the Government made a surprise announcement to cool property speculation.

Mr Lee stressed that the Government cannot control property prices.

'We can try to influence it, but whether it goes up or goes down depends on sentiment, depends on what happens in the region and the world...

'But we can apply measures to try to guide it in a broad way, so that if it is getting carried away, we can pull it back a bit,' he added.

The measures announced last Friday include the introduction of stamp duty on those who sell their residential property within a year of buying it. The duty is around 3 per cent of the price.

Also, buyers can borrow only up to 80 per cent, not 90 per cent, of their property's value from a financial institution.

Mr Lee said these measures were a pre-emptive move. Prices have risen sharply in the last six months, he noted.

'While it has not yet reached a dangerous level... the trend has been so fast, and the mood so exuberant, that we are worried it will get carried away beyond what is wise,' he told about 1,300 Ang Mo Kio GRC residents attending the dinner at his Teck Ghee constituency.

'It is better to pre-empt a bubble than wait for it to get serious and have to take more drastic measures,' he said, assuring Singaporeans that his government's priority is to ensure homes remain affordable.

At the other extreme, falling home prices is undesirable for the many Singaporeans who own their homes, he added.

A home, an appreciating asset in Singapore, is a nest-egg, said Mr Lee.

'Please take good care of it. It's for you to live in, it's for you as an investment, it's for you for your old age.

'Don't think of selling prematurely to make a quick buck,' he advised.

Alternatively, home-owners can pass their flats on to their children, he said and added: 'This means you need to have children to pass your home to.'

Mr Lee then reiterated his worry that not enough Singaporeans are starting families. Total fertility rate last year hit a new low of 1.23. For the Chinese community here, it was even lower at 1.09.

But falling birth rate is an issue faced by East Asian countries, he noted, and it is partly a result of changing values.

In China, young people, to avoid nagging from their parents, have resorted to 'renting' a boyfriend or girlfriend to take home during this new year period, Mr Lee observed.

'It's amusing, but it's also sad,' he said. 'I'm relieved there's no such reports in Singapore. I hope it doesn't happen.' Still, a little social pressure is useful but more importantly, parents and relatives need to encourage them and show them support.

Unmarried residents interviewed said they first needed to save enough and have a stable career before settling down and starting a family.

Said Mr Jason Quak, 28, an operations manager: 'Now you need money for everything, especially for a wedding.'

He and his 25-year-old girlfriend want to buy a flat in Ang Mo Kio, near his parents, but he is not confident he can find one within his budget of around $300,000.

Teacher D. George, 32, welcomed the latest anti-speculation measures but argued that these will not have a major impact on rising HDB prices.

rchang@sph.com.sg


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MAKE-BELIEVE BOYFRIEND

'It's amusing, but it's also sad. I'm relieved there's no such reports in Singapore. I hope it doesn't happen.'

PM Lee, on how young people in China 'rent' a boyfriend or girlfriend to take home, to avoid nagging from their parents