Monday, February 22, 2010

HDB review: Findings out next month

NEWS of potential measures affecting the public housing market could come as soon as next month, hot on the heels of curbs announced last Friday aimed at cooling the private property market, Minister for National Development Mah Bow Tan said yesterday.

He was speaking to reporters yesterday evening at a Chinese New Year event at Tampines East Community Club.

When asked about possible measures for the Housing Board market, Mr Mah said: ‘We are looking at something. I’ve asked HDB to look at some of the activity that is going on in the market.’

He added that he would be making ’some announcements’ during the Committee of Supply debates in Parliament on his ministry’s Budget next month.

Mr Mah had said late last month that HDB was embarking on a review of its rules to stamp out possible speculation, and that the findings would be out in a few months’ time.

The review is being conducted as HDB prices have been rising, with some buyers said to be renting HDB flats illegally or selling them after a one-year period to make a fast profit.

Yesterday, Mr Mah noted that there was a ‘high risk’ of a property bubble forming in the private homes market.

Last September, the Government announced several measures which led to the sales volume slipping.

But there have since been renewed signs that the market is heating up.

Sales volume has risen sharply, with developers selling 1,476 units last month – three times higher than in December.

And prices rebounded in the second half of last year.

Mr Mah said: ‘If you look at the environment, interest rates are low, there’s a lot of exuberance in the market as a result of positive sentiments.

‘If you see a lot of speculation, especially at a time when what we are seeing is a confluence of factors (such as) low interest rates, positive sentiment, volumes actually picking up – those are the danger signals. We have to make a decision.

‘The question is, do we act now, take small steps, or wait until the bubble has formed, by which time we may have to take more drastic steps. So we decided to act now. It depends on how the market reacts. If there is a need to, we will take further measures.’

He said there were a few other possible measures the Government could take but declined to elaborate.

‘It’s a choice between not doing anything and letting the exuberance take over and then having to act when everything is too late.’

Taking smaller steps means that the number of people affected, especially genuine buyers, will be ‘very little’, he added.

Mr Mah said that given the current market situation, the introduction of a seller’s stamp duty will make speculators ‘think twice’ about flipping properties.

‘We are not against prices rising. If the economy is doing well and there is genuine demand, prices rise. It’s part of the market workings.

‘What we want to see is a very stable, sustainable market, that prices don’t run up faster than what the economy can accommodate.’

Source: Straits Times, 22 Feb 2010

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