Monday, February 22, 2010

Speculation: ‘More steps if needed’

The government will take more measures to curb speculative activity in the property market if it has to, Minister for National Development Mah Bow Tan said yesterday.

Measures targeted at the HDB (Housing & Development Board) market could also be on the way. These could be announced during the Budget Debate and Committee of Supply sessions following today’s Budget announcement, Mr Mah added.

‘Going forward, we will monitor the market closely and if there is a need to, we will take further measures,’ Mr Mah said. ‘I think that there are a few other measures that can be taken.’

Mr Mah, who was speaking to reporters at a community event last night, added that it is better not to speculate on what those measures might be and instead ’see what happens’ first.

The government on Friday announced two new property policies to curb speculation and encourage financial prudence.

A seller’s stamp duty will be levied on those who buy a residential property and sell it within a year. Currently, stamp duty is levied only for the purchase of a property and not its sale.

Also, the loan-to-value limit on housing loans will be lowered from 90 per cent to 80 per cent.

The two measures, which come on top of previous policies announced in September last year to cool the market, are not expected to hit prices and the volume of private property sales, market watchers said.

Mr Mah said that the government is taking very measured moves – which are designed to have a minimal impact on genuine homebuyers – as it tries to pre-empt a property bubble from forming.

Measures are being implemented in steps this time around, unlike in 1996 when many measures were introduced at one go.

‘We have to weigh very carefully what are the measures we want to take, such that we don’t cause the market to collapse, but at the same time, we let a little bit of air out of the bubble,’ Mr Mah said.

And as for the HDB market, ‘we are looking at something’, he added.

Mr Mah said in late January that HDB is checking to see if buyers are using government-subsidised flats to speculate in the property market – even as resale flat prices hit a new high in the fourth quarter of 2009.

Source: Business Times, 22 Feb 2010

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