May 15, 2012

Despite the encouraging signs brought about by the government’s property cooling measures, concerns still remain with regards to soaring mass market home prices and shoebox units, said Khaw Boon Wan, Minister for National Development.

As of Q1 2012, there are 2,500 completed shoebox apartments accounting for 1.2 percent of the 210,000 non-landed units in the private housing stock. By 2015, the supply is expected to rise to 9,700.

Mr Khaw said that many of the new shoebox homes will be located in the heartlands where their appeal among tenants is still untested as 80 percent are located in the central region.

As for mass market properties in the OCR (Outside Central Region), prices have continued growing although it’s stabilising in the central region.

“We will continue to monitor these developments closely and will not hesitate to take action, if necessary, to ensure that the housing market remains stable and sustainable,” Mr Khaw said.

Recent policies, which included five rounds of cooling measures, have helped to eliminate much of the speculative demand and ramped up the supply of private and public housing.

In fact, private home prices declined marginally in Q1 2012 following nine consecutive quarters of moderate price increases. In addition, the proportion of sub-sales in the market fell sharply to around four percent.

The ABSD (additional buyer’s stamp duty) also helped dilute foreign buying in the residential market to just seven percent.

“In the public housing market, most first-timers now have a chance to select a BTO (Build-to-Order) flat if they apply for one. HDB resale prices have also moderated, increasing by 0.6 percent in Q1 2012. This is the smallest price growth in recent years,” noted Mr Khaw.

He added that starting 18 May, developers will be required to provide more information on scaled unit floor plans as well as a breakdown of the unit floor area.

The Housing Developers (Control and Licensing) Act will also be amended to require developers to faithfully represent their actual units in their showflats. Once passed in Parliament, the changes will be implemented within the second quarter of this year.

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