Real estate consultancy Savills says home prices would have gone up by an additional 9.2 per cent in 2012 over 2009 if not for the implementation of property cooling measures.
SINGAPORE: Demand for private homes in Singapore has been robust since 2009, pushing home prices to record high.
To curb price increase, the government has implemented seven rounds of property market cooling measures since September 2009.
Real estate consultancy Savills said home prices would have gone up by an additional 9.2 per cent in 2012 over 2009 if not for these measures.
Speaking at an industry seminar organised by the Real Estate Developers’ Association of Singapore, Savills said it is unlikely that policy makers would be removing any of the measures anytime soon.
Industry players said the government’s intervention has reined in asset price inflation.
Private home prices rose just one per cent in the second quarter of this year, on the back of a 16 per cent drop in sales volume.
Chia Boon Kuan, president of the Real Estate Developers’ Association of Singapore, said: “We are approaching an important inflexion point in the real estate cycle. Against this backdrop of increased market volatility and a maturing real estate cycle, prudence and a long-term perspective are essential for the health of the property market ecosystem.”
Mr Chia added that in a further sign of a stabilising market, HDB resale prices grew 0.5 per cent during April to June, the slowest rate since Q1 of 2009.
Looking ahead, Savills said home prices are likely to rise further as Singapore strives to accommodate an increase in population by 2030.
Alan Cheong, senior director of research and consultancy at Savills Singapore, said: “If you carry on with this series of measures – where the government would tap on the brakes and the same kind of regime goes on to 2030 – prices would still go up by 52 per cent, but that is over the next 18 years. On an annual compounded basis, it is about slightly over two per cent.”
Some analysts said the government should also re-look into policies to fast-track construction of new homes.
Ku Swee Yong, CEO of International Property Advisor, said: “We have been launching a lot of land but we have not been accelerating the completion of the properties. Similarly for HDB, we have launched so many BTO (Build-To-Order) in the past few years. Each year is a record breaking year, but in terms of the pace of construction, buyers are still taking 40 to 48 months to collect their keys. That doesn’t match with the inflow of about 100,000 adults coming into Singapore every year in the last three years.”
Mr Ku said tweaking the government land sales programme could also put a lid on runaway home prices. He suggested that four to five sites be put on sale together with the same closing date or have an open auction system where bids are openly disclosed to interested developers.
Last year, the private sector invested S$12.6 billion in sites for development under the government land sales programme, up from S$10 billion in 2010 and S$12 billion in 2011.
Some analysts said there are other ways to re-channel the pent-up demand for properties in Singapore.
For example, property consultancy Savills said this includes developing alternative investment products linked to real estate or allowing the use of CPF savings to buy properties overseas, especially those built by accredited Singapore developers.