According to National Development Minister Khaw Boon Wan, about 200,000 residential units will be built by 2016. 80,000 of these would be private properties, 110,000 to be HDB units and 10,000 Executive Condominiums.
These figures, he pointed out in his blog post on January 18, are equivalent to building 4 towns the size of Ang Mo Kio. In this entry, he also shared his belief that the supply would be able to meet the demand within 4 years. The market is currently out of balance, he explained, because of under-building in the past coupled with strong investment demand today.
Mr Khaw also wrote that the current property cooling measures were necessary to prevent prices from exceeding economic fundamentals. If that happens, it could only be resolved by a drastic price correction in the future, which would not benefit anyone. He said that the package had been carefully created to protect first-time property buyers.
Under the new cooling measures, buyers face a higher stamp duty, while those with an existing housing loan would have to pay a larger down-payment when buying another property. These measures are counter-cyclical and would be lifted once the market is balanced again.
Seven property cooling measures might seem a large figure, especially when compared to the rest of the world. But industry insiders pointed out that Singapore has always been a property hotspot and is constantly experiencing high demand from foreign investors. The local property market is one that can take such measures. The cooling measures will help prices to moderate and slow growth down to close to a flat rate. If not implemented, prices could experience a runaway increment of up to 10% this year.
Mr Khaw also cautioned those wishing to buy a property to bear in mind that the low interest environment is atypical and might not prevail for much longer.