ST : Do more to prevent property bubble

May 10, 2010

Do more to prevent property bubble

I REFER to last Friday's article, 'Most flats sold with low cash upfront: HDB'. I believe this trend is not healthy as it indicates that valuation figures for HDB flats have finally caught up with the recent years' soaring HDB resale flat prices.

From these soaring prices, no one would have believed that we went through and are still recovering from an economic downturn. A three-room HDB flat in Tanjong Pagar Plaza was going for $280,000 in 2008, but in just two years, it is now going for more than $400,000.

The younger generation of Singaporeans and even their parents are feeling that an HDB resale flat is no longer within their means.

Generally, new job entrants who are thinking of starting a family would rather buy a resale flat in mature estates than a new flat in the outskirts. This is to cut down on the time taken for their daily commute to work, particularly if they have young children that they need to take to grandparents' homes or childcare centres each day.

I notice that the Ministry of National Development and the Monetary Authority of Singapore have been taking sporadic measures to curb the sharp increases in property prices, but the impact is not really visible. I understand that the Government has to balance the needs of different groups - investors who wish for property prices to rise, and home buyers who are averse to soaring prices.

The Government should take more comprehensive preventive measures to curb a property bubble, rather than resort to remedial actions when a bubble forms or bursts.

Recent strong measures taken by the Chinese government to curb undue property speculation have sent a strong signal to potential speculators that the Chinese government means business. These measures have also done much to reassure the public. I wonder if our Government has taken sufficient measures to do the same.

Ong Boot Lian (Ms)