A single-digit fall in public housing resale prices next year is manageable and "a very good development", said Minister for National Development Khaw Boon Wan yesterday.
"A soft single digit is something the human mind, and employers, employees, the environment and the economy can adjust to," he told reporters.
Mr Khaw was witnessing the handover of the fifth completed block for the Waterway Woodcress Build-to-Order (BTO) project. This also marks the meeting of the Government's target of 28,000 new flats for this year - a record in recent years.
Housing Board flat resale prices, as at the end of the third quarter of this year, have fallen 6.1 per cent year-on-year.
Mr Khaw said that he "took a very decisive step" to tilt the balance between buyers and sellers when he first joined the Ministry of National Development.
"At that time, it was a little bit too predominantly a sellers' market. Now, the balance is shifting and we expect it to continue to shift next year. I don't think it has stabilised yet," he told reporters.
He added that a soft downward adjustment, rather than a drastic market correction, of public housing prices would be healthy and not "painful".
"Drastic corrections are seldom good, because those are usually (due to) some external events, for example the Asian financial crisis, severe acute respiratory syndrome, Ebola…so that yes, you may seemingly get cheaper prices in houses, but you might find yourself losing your job because it means the underlying economy is very fragile and brittle."
Mr Khaw also said, with no indication of any timeline, that some of the cooling measures are temporary.
"So, obviously, when the temperature becomes warmer, we have to adjust...Question is:
When do you do that and how do you do that? So those are obviously issues of consideration next year."
He clarified that permanent measures refer to those that encourage prudence. The Monetary Authority of Singapore has set certain parameters which can be further calibrated, he said.
"But the framework, I think it's the right framework. I think (the total debt servicing ratio) is not a wrong framework. In fact, it's a good framework which now several other central bankers are also taking note of, and some have already implemented their own version," he said.
In a blog post yesterday, Mr Khaw said that the pace of public housing construction next year will be scaled back as well, with 26,000 HDB flats targeted, down from the 28,000 flats completed this year.
He also told reporters that with the first-timer backlog of demand for new flats cleared, his focus for the year ahead will be on singles and low-income families who cannot afford flats and are renting.
Monday, Dec 29, 2014
The Business Times / The Straits Times
Source: AsiaOne (29 Dec 2014)