Demand for off-plan property in Singapore has increased since the beginning of the year with sales for the first seven months of 2009 already exceeding the total for 2008, it is claimed.
According to the latest figures from the government there were over 10,000 units sold up to the end of July this year compared with just 4,260 in the whole of 2008.
Now Mah Bow Tan, the minister for National Development said the government is introducing new measures to ensure that the recovery in the market is stable and sustainable.
He revealed that these measures would be aimed at preventing the kind of rampant speculation that could damage the real estate recovery. Already the Monetary Authority of Singapore has cancelled its Interest Absorption Scheme and Interest Only Housing Loans with immediate effect for all private residential projects. The only exception will be uncompleted private residential projects where the units had already been offered for sale under the IAS before 14 Sep 2009.
Bow Tan said this was seen as a necessary move to curb any speculation in a buoyant market where prices are rising rapidly as they are forms of housing loans that entirely eliminate or substantially lower regular installment payments for property purchasers in the first few years before the properties are completed.
‘Genuine home buyers can continue to purchase private housing under the standard payment scheme. The removal of the Interest Absorption Scheme and Interest Only Loans will also encourage prospective home-buyers to consider carefully their ability to afford the properties over the long term and not rush into any purchases. This will promote a more healthy and sustainable property market in the long-run,’ he said.
In response to the strong demand from home buyers, developers have triggered four sites to date this year from the Reserve List Programme, which together could yield about 1,600 units,’ he confirmed. There are still 16 residential sites in the current Reserve List that can be triggered for sale by developers, and the department is keen to replenish the supply when drawing up the list for the first half of 2010 and will bear in mind an expected uptake in demand. The details will be announced towards the end of the year.
Also a number of measures announced in January this year to help stabilize the property market because of a sharp fall in demand and considerable uncertainty in the economic outlook at the time, will not be extended when they expire.
These were aimed at providing developers with a greater flexibility to adjust supply in response to a property market downturn. They include a one year extension of a project’s completion period, the re-assignment of Government land sale sites and private land owned by foreign developers and allowing developers up to four years to dispose of all private residential units in the development, all of which are due to expire on 21 January 2010.
Renting out unsold private residential units for a maximum of four years and a two year deferral of property tax for land under development, will also not be renewed after January 2011.