National Development Minister Lawrence Wong said the government may offer more Build-To-Order (BTO) flats next year, as demand is expected to increase with the recent policy changes, such as more CPF grants and higher income ceilings, reported Channel News Asia.
Notably, the supply will be a slight adjustment from the 15,000 units planned for 2015, but still below 20,000 units.
“We had a huge housing programme where we built more than 20,000 at one time over a few years, then tapered off to 15,000. We are not going back to over 20,000, but it’s a slight adjustment from 15,000,” said Wong, during a visit to the Waterway Terraces in Punggol. He explained that the increase in new flat supply does not mean the government is diverting from its “tapering approach” to the housing market.
“We are continuing to taper the housing programme and we will continue to move in that direction. But I think we may need to make some temporary adjustments in order to accommodate this higher demand in housing arising from policy changes.”
Accordingly, Singapore’s youngest HDB town, Punggol, will see 6,391 BTO flats completed by the end of the year, with another 9,876 units added to the town’s supply over the next two years.
The HDB revealed in July that it will slash this year’s new flat supply from 16,900 to 15,000, after having launched around 22,000 units in 2014. Wong noted that the HDB will assess the response at the next BTO sales exercise in November, and finalise the supply for next year before year-end.
Commenting on the property cooling measures, Wong said it is “not time yet” to ease the measures, as price adjustments have been moderate compared with price hikes seen in earlier years. “We don’t want to risk a premature market rebound,” he said.
Flash estimates from the Urban Redevelopment Authority (URA) and HDB showed that home prices hit a two-year low in Q3 2015. Aside from this, easing the property cooling measures will also depend on various other factors, said Wong.
“We watch the situation very carefully, not just price indicators but a whole range of indicators — the economic situation, the situation overseas, whether the Fed (US Federal Reserve) is going to increase interest rates and by how much and when, and our own domestic situation.”
He noted that the cooling measures introduced by the government not only helped to stabilise the property market, it also allowed for an orderly adjustment in prices towards a more sustainable property market.
“We don’t have to adjust by unwinding everything, we could adjust by unwinding some parts of the cooling measures, particularly those that may be more cyclical in nature. But it’s premature to say what exactly we will unwind, what will happen. I think for now, we are not planning to unwind any of the cooling measures and we should let it continue.”