Change in Property Buyers' Profiles

Mr Gan Thiam Poh asked the Minister for National Development (a) what is the total number of properties purchased for investment purpose and owner occupation by Singaporeans, permanent residents and foreigners respectively since further property cooling measures were introduced in January 2011; and (b) whether such cooling measures are effective in stabilising property prices.

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I assume the Member is asking about the private housing market, since foreigners are not allowed to buy HDB flats and public housing is largely for owner-occupation.

The total number of private residential properties bought was about 19,000 in 1H2011, 17,000 in 2H2011 and 22,000 in 1H2012.

Our cooling measures aim to eliminate speculative demand, encourage financial prudence and moderate investment in our housing market. They are complemented with an aggressive supply ramp-up. Over the next five years, about 94,000 housing units will be completed. This is about one-third of the current stock of private housing.

The measures have produced results:

(1) The increase in the Property Price Index has come down from 18% in 2010, to 6% last year, to just 1% in the first three quarters of this year.

(2) The proportion of properties bought by foreigners has fallen from 18% last year to 6% in the first three quarters of this year.

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(3) The proportion of sub-sales, which is a proxy of the level of speculation in the housing market, has remained low, at about 6% in the first three quarters of 2012. It was 8% last year.

Nonetheless, prices remain firm. So, whilst things are improving, we have not yet restored the equilibrium in the housing market. Ample global liquidity and the current low interest rate environment, which are contributory factors, are likely to persist for a while.

As this is a dynamic situation, we remain vigilant, ready to act, if and when necessary.

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