ST : S'poreans driving private property market, says Mah

Oct 19, 2010

S'poreans driving private property market, says Mah

By Jessica Cheam

LOCAL buyers still make up the bulk of private home buyers in Singapore. Permanent residents (PRs) made up 13 per cent and foreigners 12 per cent of sales in the second quarter respectively.

Similarly, speculative activity in the private property market is driven mostly by locals. PRs and foreigners accounted for about 27 per cent of all sub-sales in the past two years.

National Development Minister Mah Bow Tan revealed these figures yesterday in Parliament in response to MPs who asked if PRs and foreigners were 'flipping' properties in Singapore.

Flipping, or a sub-sale, takes place when a buyer purchases a new apartment, then resells it before construction is complete.

Mr Mah added that the second quarter sales figures were close to the average of 12 per cent and 10 per cent for PRs and foreigners respectively over the past two years. PRs and foreigners also account for a relatively low 6 per cent of all landed home sales.

As a cosmopolitan city, it was important for Singapore to let foreigners and PRs buy properties here, while monitoring 'how much of the market is actually made up of foreigners and PRs', he said.

MPs also voiced their concerns on the health of Singapore's property market, with Madam Cynthia Phua (Aljunied GRC) asking whether any more measures would be introduced.

Mr Mah responded that this 'ultimately depends on what happens in the (property market) situation'.

'We have taken an approach of having few calibrated steps rather than to take one big step or one big bang approach to try to cool the market down.'

Given many factors involved in shaping the property market, Mr Mah said it was 'presumptuous or even foolhardy' to predict what the market would be like in a year.

He added: 'Where we see that there is a danger of the market heating up further or not moving in a healthy direction, we reserve the right to take the appropriate action.'

On the market reaction to the recent measures, Mr Mah noted that 'there are signs of greater stability in the market'.

Based on flash estimates, the increase in private home prices has moderated to a 3.1 per cent increase in the third quarter, compared to 5.3 per cent in the second.

Volume of sales of private homes and HDB resale flats declined 28 per cent and 25 per cent respectively last month compared to August.

Responding to Ms Lee Bee Wah (Ang Mo Kio GRC), Mr Mah reiterated that the recent rules tightening ownership of HDB flats was to dampen demand from those who are not in urgent need of housing.

For example, those who own private property here or overseas, and want to buy an HDB flat, must dispose of their private property within six months. Responding to MPs' concerns, Mr Mah said that HDB will look into the circumstances of special cases.

HDB has received over 100 appeals from potential flat buyers who own overseas properties, and over 150 appeals from those who own local private properties.

jcheam@sph.com.sg