Stabilising Property Prices

Mr Christopher de Souza asked the Minister for National Development (a) whether the 2012 and 2013 rounds of cooling measures have dampened demand from foreign buyers and reduced their speculation in the private property market; and (b) what can be done to ensure a predictable regulatory regime, beyond ad hoc cooling measures, to regulate foreign ownership in Singapore's property market in order to create sustainable property prices.

The Minister for National Development (Mr Khaw Boon Wan): Mdm Speaker, the cooling measures have, as intended, dampened foreign demand and reduced speculation. Since 2011, foreign buying in our private housing market has shrunk, both in proportion and in absolute numbers.

The proportion of purchase by foreigners has fallen from 17% in 2011 to 7% in the third quarter of this year. Over the same period, the number of purchases by foreigners has fallen from about 1,400 per quarter to 330 in the third quarter of this year.

As for property speculations, sub-sales, as a proportion of all private housing transactions, have dropped from 7.6% in 2011 to 4.6% in the third quarter of this year. In absolute numbers, sub-sale transactions have fallen from about 670 per quarter in 2011 to 181 in the third quarter of this year.

Our priority is to support home ownership for Singaporeans. This is reflected in our policies. Only citizens are allowed to buy new HDB flats and provided grants to purchase resale HDB flats. Almost all landed housing can only be purchased by Singaporeans. The private condominium market allows foreigner buying and the cooling measures have moderated their impact. The resultant trend is encouraging but we continue to closely monitor the market and we will not hesitate to act further when necessary.

Mr Christopher de Souza (Holland-Bukit Timah): Mdm Speaker, I thank the Minister for the response. My question also had as its intention a system that would create sustainability of prices. Therefore, I just like to ask the Minister whether it is still his position that a collection of different avenues in the form of stamp duties or additional stamp duties would be better than, for example, a restriction on foreign ownership to an extent as in the Australian model. So, I just want to get a sense that it is the versatility of the many tools presently in the system, rather than something a lot more draconian.

Mr Khaw Boon Wan: Madam, managing the property market is both an art and a science, which also requires a heavy dose of good luck. I would say the outcome in the last two and a half years has been "so far so good". There is not really a single measure or a silver bullet that will solve the problem and deliver a particular outcome.

Even the Australian model that the Member talked about has its fair share of property bubble. Currently, in fact, they are still trying to sort things out there, with much difficulty.

We do require a basket of measures and calibrate them in a way to achieve a particular outcome. I certainly share the same wish as the Member to achieve a sustainable, perhaps, even boring, property market. But for a small Singapore market that is plugged into the global system, we face many factors which are completely outside and beyond our control. That is why, although the Member in his question referred to our measures as ad hoc, I am afraid that this is part and parcel of managing our property market, that we have to be nimble and we have to try to anticipate and make certain projections but we can never be sure. And, therefore, for some measures after we have done it, we still have to re-calibrate the quantum.

As I said, "so far so good"; I am seeing more light at the end of the tunnel but we are still in the tunnel. So, we continue to have to watch carefully over the market. At the same time, we wish for good luck too but, so far so good. As you can see, I am now more relaxed. My hair has even turned black.