RESIDENTIAL PROPERTY TRANSACTIONS (Changes to financial rules)

Mr Chng Hee Kok asked the Minister for Finance if he will make further changes to financial rules on residential property transactions in view of the economic slowdown.

Mr Lim Hng Kiang: Mr Speaker, Sir, can I take Questions 16 and 17 together?

Mr Speaker: Yes.

Mr Lim Hng Kiang: The prices of residential units had fallen by 9.1% in first quarter of 1998. Cumulatively, prices had fallen by 24.2% since the second quarter of 1996. However, the sales of uncompleted units had increased by 17.3% in the first quarter of 1998 compared to the last quarter of 1997. As at first quarter of 1998, there was an accumulated stock of about 8,900 units that had been launched but not sold. In addition, there were about 11,500 units that have not been launched yet. The occupancy rate of the completed units had remained fairly stable at about 91%.

Due to the regional economic turmoil, it is generally expected that demand for private residential properties will remain weak. However, the success of some recent property launches indicates that there is a pool of potential buyers willing to enter the market at the right price.

The Government had, in November last year, suspended the stamp duty payable on properties sold within three years of purchase and made other adjustments to the Government's land sales programme and to the project completion period specified for residential land sales.

We do not think there is a need to make further refinements to the financial rules on residential property transactions or to introduce other adjustments at this point in time. The Government, however, will continue to monitor the situation closely.

Assoc. Prof. Low Seow Chay (Chua Chu Kang): Sir, I would like to know the views of the Minister and his message to the developers. Judging from the recent overwhelming sales in two condominium projects in Woodlands and one landed property in Chua Chu Kang, I think the demand is there. What is the message of the Minister to the developers, gauging from this kind of response?

Mr Lim Hng Kiang: The message to developers and purchasers is: let the market set its price.

Mr Shriniwas Rai (Nominated Member): Mr Speaker, Sir, from the Minister's reply, I would like to ask a supplementary question. He said that the time is not opportune for a change, but the newspaper reports seem to indicate that mortgage sales are on an increase and there are few takers, if the last four auction sales are any indication. I would ask the Minister - I am not asking for a specific date - whether he could give a period of time, and whether he will review the position.

Mr Lim Hng Kiang: The Government is monitoring the situation closely. We review the situation all the time. So if the situation takes a turn for the worse and it is time to act, we will act.