Published 30 January 2011
The Sunday Times
By Amresh Gunasingham
If you are a Housing Board flat owner looking to upgrade to a private property, wait a little longer before signing on the dotted line.
‘Housing prices are rather high now… if you wait for a while, you might find more affordable properties,’ Mr Mah was quoted in the paper as saying.
Serious home buyers should be patient, said Mr Mah, as he expects interest rates and the supply of private properties to rise soon, and both these factors should help to curb the steady trend of rising prices.
‘When that happens, you will be thankful that you didn’t buy right now!’ he added.
The property market hit new highs last year, fuelled by strong demand from cash-rich buyers, low interest rates and strong economic growth.
Private home prices moved up 17.6 per cent last year after rising just 1.6 per cent the year before. Non-landed property, which includes condominium units popular with Housing Board upgraders, rose 14 per cent.
Mr Mah said the Government is trying to dampen a ‘flock’ mentality that seems to have developed among property investors lured by the promise of making a quick profit.
He added that the recent market cooling measures – which include hefty sellers’ stamp duties and lowered loan limits for second mortgages – should be seen in this context.
Rather than deterring home buyers from upgrading their houses, or reducing prices, they are meant to stabilise the market so that prices can increase at a more steady rate, he said.
‘Reducing prices on purpose is not our aim, and it is of no use at all,’ said Mr Mah. ‘This may make some home buyers happy, but on the other hand, home sellers will be unhappy.’
For those who cannot wait and need to upgrade their homes right now, Mr Mah said he believed the new measures should not deter them as long as they have sufficient cash flow.
The minister also said that the Government is studying the effects of the latest round of measures closely, and warned that it could act again in three to four months’ time.
He said property players will also need some time to digest the new measures and assess their impact before deciding what to do next.
‘Although there are some who have reacted in knee-jerk fashion, most buyers and sellers are adopting a wait-and-see approach,’ he added.