Last week’s package of property cooling measures 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. That will not do anyone any good.
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.
The market is 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.
How much is coming on stream? Plenty! Indeed, some 200,000 new housing units will be constructed – 80,000 private properties, 10,000 ECs and about 110,000 public housing. This is equivalent to the building of four new Ang Mo Kio towns by 2016! And we are still building more.
In fact, more detailed data are also available: on URA’s website (for private properties) and HDB’s website on upcoming housing supply, and also information on transacted sale prices and rental rates for individual flats.To help buyers track this, I have put up a chart on my Facebook page to give a visual representation of the upcoming housing supply. We will refresh the chart with each GLS/BTO update.
For those contemplating buying a property, please study these websites and be prudent. Do bear in mind that the current low interest rate is unusual, and the normal high interest rate will return in time to come.
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