Source : Business Times - 26 Nov 2008
The Singapore government will not introduce measures to stimulate demand or prop up prices artificially in the property sector.
Speaking at an industry event on Wednesday, National Development Minister Mah Bow Tan said such efforts are not sustainable.
However, the government will study suggestions by market players on how to help the property sector.
Developers are feeling the heat from the economic downturn, credit crunch and poor consumer confidence, and many new project launches have been shelved.
To boost property demand, some developers hope the government could relax some of its policies, such as reviving the Deferred Payment Scheme, reducing the development charge rate and introducing property tax exemptions.
But the national development minister said there are limits to what the government can and should do.
Mr Mah said: “We cannot dictate to banks that they should extend loans to companies or individuals with weak financial standing. Any measure seen to be knee-jerk or excessive might even weigh market sentiment down further. It is in our interest to ensure that the property prices move in line with economic fundamentals, as it affects home ownership, asset values, retirement savings and other sectors of the economy.”
Mr Mah said the government will not hesitate to act if needed.
It could roll out public sector projects which have been deferred to boost the industry when construction costs come down, and the pressure on manpower and building materials ease.
The deferred projects are worth some S$4.7 billion. They include the construction and upgrading of schools, civic and community institutions as well as other public infrastructure.
Mr Mah said a number of major projects secured in past years will also create jobs and sustain capital spending in the economy.
Together, the real estate services and construction sectors accounted for about 9.6 per cent of overall GDP and 13 per cent of total employment in Singapore in 2007.
The Real Estate Developers’ Association (REDAS) said market stability and restoring confidence are important in helping the sector weather the economic storm.
REDAS added that developers should take this opportunity to improve its product and get ready for the next upturn.
“Pricing alone does not lead to sales volume; sentiment and confidence leads to sales volume. A tripatite plan of action is needed between developers, financiers and the government through moderating new supply, shoring demand and introducing fiscal measures to help ease funding for the industry,” said Simon Cheong, president of REDAS.
The association said it will work closely with the government to provide timely market feedback.
Despite the tough times, REDAS also hopes developers will continue to drive sustainable development.
Source : Channel NewsAsia - 26 Nov 2008
Posted in General, Market Reports | Tagged: Deferred Payment Scheme, Development Charge, Property Tax Exemptions, Public-sector Projects, Singapore Government, Singapore Property, Singapore Property Market | No Comments »
Gov’t has important role in property market: Mah
Posted by luxuryasiahome on November 26, 2008
The Government has an important role in ensuring the long-term stability and smooth functioning of the property market, said Minister for National Development Mah Bow Tan at the Real Estate Developers’ Association of Singapore’s (Redas) anniversary dinner tonight.
‘Let me first highlight why the real estate sector is important to us,’ Mr Mah said.
Mr Mah’s comments comes in the wake of public queries over the government’s role in the property market, with some wondering if the land prices should be left to market forces.
Mr Mah said there are mainly 3 key reasons.
‘First, it is a major economic sector in Singapore. The real estate services and construction sectors together accounted for about 9.6 per cent of overall GDP and 13 per cent of total employment in Singapore in 2007. Second, the health of the property market affects other major sectors of the economy. Third, as a country with the highest rate of home-ownership of more than 90 per cent, the property sector is where most of us have invested our hard-earned lifelong savings.’
The Government will do whatever is within its means to help all the various economic sectors in Singapore cope with the current crisis and mitigate the impact on businesses, Mr Mah said.
For the property market specifically, the Government will ensure that the supply of land released for development is well calibrated and sufficient to meet demand over the medium to long term. It will also give developers the flexibility to activate Government Land Sales supply according to market demand by using a pre-dominantly market-led approach through the use of the Reserve List.
The authorities will also provide detailed real estate information to enhance market transparency and allow informed decision-making by market players, and will put in place policies that ensure that systemic risks to both the demand and supply sides are minimised, thus safeguarding the overall health of the property market, Mr Mah added.
Finally, the Government will also guard against irrational market behaviour such as excessive speculation that is not in sync with economic fundamentals, Mr Mah said.
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