THE Government will help home owners during this economic downturn, but moves to artificially prop up the private property market will not work in these uncertain times, said National Development Minister Mah Bow Tan yesterday.
Mr Mah - speaking to the media at a hongbao presentation and Chinese New Year variety show held in Tampines East last night - said buyers are likely to stay on the sidelines in view of the economic uncertainty.
‘We’re in recession… and there’s a lot of uncertainty. People are concerned about their jobs, and all this is feeding through into the property market. Even if there’s demand, I think there’s a lot of wait-and-see attitude,’ Mr Mah said.
According to data from the Urban Redevelopment Authority (URA) earlier this month, only 4,287 homes were sold last year.
This capped the worst year for new sales here since 1990.
Mr Mah said the Government is watching the market very closely. ‘If there’re sensible measures we can take, we’ll certainly do so,’ he said.
What about measures such as a temporary suspension of stamp duty or a reintroduction of the deferred payment scheme?
Some experts have said such measures could give the property market a much-needed boost as they might give buyers greater incentive to purchase homes.
The deferred payment scheme was introduced during the Asian financial crisis to boost the market, but scrapped in late 2007.
Buyers could secure a property for a relatively small cash down payment and then flip it for a profit before so much as a brick had been laid.
Stamp duty is basically a tax that has to be paid for the stamping of documents relating to properties and shares, for instance, leases or mortgages.
Mr Mah said: ‘At this stage, it’s not the right time for us to talk about stimulating demand.’
He added: ‘Until there’s a little more certainty in the market, it’s pointless to talk about artificial measures to stimulate demand. They’ll not work.’
The Government has tried to help ’stabilise’ the market by removing some of the excess supply, he said.
It has also tried to disclose as much information as possible, including sales figures and prices, so the market ‘knows what’s happening’ and people can make ‘informed decisions’.
The Ministry of National Development (MND) said last month that it had decided not to add any new sites to the Government Land Sales Programme for the first half of this year.
Referring to this move, Mr Mah said: ‘This will help to stabilise the market and ensure there is no further overhang.’
As for next week’s Budget, Mr Mah said he could not disclose any details but the focus would be on helping ‘people hurt in the economic crisis’.
The Government will look into how it can help homebuyers own their own homes. It will also see how it can help the elderly monetise their flats so they can earn some money that is ’sustainable’.
Referring to the Government’s lease buyback scheme, Mr Mah hopes to see it implemented during the first half of this year.
Source : Straits Times - 17 Jan 2009