200,000 new homes in the works

The large supply of units that will be coming on stream in the coming years, coupled with an inevitable end to the current low interest rate environment, are factors which those contemplating buying a property need to take into account.

This was the reminder from National Development Minister Khaw Boon Wan in his blog yesterday as he acknowledged that the market was temporarily not in balance because of under-building in the past and high investment demand today.

"But we have been ramping up supply and in 2, 3, and 4 years' time, supply will have caught up with pent-up demand," stressed Mr Khaw.

Indeed, some 200,000 new housing units will be constructed - 80,000 private properties, 10,000 ECs and about 110,000 HDB flats - which is the equivalent of building four new Ang Mo Kio towns, by 2016.

To help buyers track the number of units coming on stream, Mr Khaw said that he would update a chart giving a visual representation of the upcoming housing supply on his Facebook page with each successful sale of a land plot via the Government Land Sales programme, or release of Built-to-Order flats.

Separately, Mr Khaw maintained that the package of property cooling measures introduced last week is necessary to soften the market.

"The alternative of doing nothing, allowing the prices to run beyond economic fundamentals, will only invite a large and serious price correction in the future.

"The package was carefully formulated to protect first-timers. Investors buying additional properties may be disappointed but I hope they will in due course come to accept that the package will also be good for them. In any case, many of the new measures are counter-cyclical in nature, to be lifted when the market regains its balance."

As part of measures introduced last week, residential property buyers (except for Singapore citizens making their first purchase) are being slapped with steeper additional buyer's stamp duty. In addition, loan-to-value limits are being lowered while minimum cash downpayment on housing loans are being raised.

In the public housing sphere, measures introduced include tighter loan eligibility for the purchase of HDB flats.

Source: Business Times –19 January 2013