Property curbs to stay for some time: Lawrence Wong

Property curbs on homes are likely to stay for some time as demand in the market remains “very resilient”, National Development Minister Lawrence Wong has said.

This has put paid to any hopes for the cooling measures to be rolled back any time soon, amid expectations that this year’s Budget would have offered some reprieve to developers here.

Mr Wong, who is also Second Finance Minister, said in a Bloomberg Television interview yesterday that the curbs “have helped to achieve a soft landing in the property market”

“If you look at the market today, demand remains very resilient,” he added.

Private residential prices in Singapore fell 3 per cent last year.

But home sales topped those in 2015 as a third straight year of price declines stoked pent-up demand from home buyers.

Some of the curbs have been in place since 2009.

They include capping debt repayments at 60 per cent of a borrower’s income, as well as the Additional Buyer’s Stamp Duty.

But the Government’s move to stand pat on the curbs came as no surprise to most in the industry.

Mr Tay Hong Beng, head of real estate at KPMG in Singapore, said the Government may be concerned that “the existing economic conditions with generally lower interest rates and relative affordability of the residential properties may create an unmanageable spike in demand from both foreign and local investors”.

JLL national director for research and consultancy Ong Teck Hui believes it is still too early to lift curbs.

He noted that this year’s Budget includes bigger Central Provident Fund housing grants for HDB resale flats, which is likely to sustain the increase in resale volume. Resale volume rose 7.8 per cent last year, compared with 2015.

This means that the resale price index, which has remained flat since the third quarter of 2015, will “certainly stabilise or perhaps rise slightly with increased demand and higher resale volume”, said Mr Ong.

A healthy Housing Board resale market with stable prices could encourage those aspiring to upgrade to private homes and lift the demand for them, he added.

Mr Lim Ming Yan, president and chief executive of CapitaLand, expects the curbs to stay in place for at least another year.

“We see volume picking up, and the price declines have slowed,” he told Bloomberg earlier this month, noting that there is no compelling reason for the Government to lift the curbs.”

“We see this trend continuing for 2017.”

International Property Advisor key executive officer Ku Swee Yong told The Straits Times: “The Government is probably reluctant to pull back on the curbs because there remain the risks that doing so will overheat the market again.”

Note: The Ministry of Finance, where Mr Wong is the Second Finance Minister, has clarified that Mr Wong had in fact said that the factors for the resilient demand in the market will remain for some time.

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