To: PM Lee
cc: Feedback Unit
cc: Opposition MPs/NCMP
19 Oct 2006
I refer to the attached article on "Private home prices accelerate in Q3".
Unfortunately, not many Singaporeans are benefiting from the price rise because the segment benefiting from this recent increase concerns those homwowners in the high-end private properties. Therefore, the bulk of the citizens, the HDB homeowners and the majority of private homeowners in the non-high end segment are not benefiting from it.
It is interesting to ask if the government's recent frentic push for immigrants (including the "rich" immigrants who have been buying up these high end properties) has anything to do with trying
to give the property sector a huge push in the arm, having been languishing for the last 10 years or so after the boom of the mid 90s came to a halt in 1996 or so. The only set back is that only the top 5 to 10% of the citizens are benefiting from the rise in their high end properties.
I remember Mr Low Thia Kiang (correct me if I am wrong) once questioned in Parliament during the last property boom in the 90s if any of the ministers and senior civil servants/officers in stat boards or their family members had bought and sold properties during that boom.
Perhaps it's time for the Opposition MPs and NCMP to re-visit this issue again with this recent "mini boom" in high end property prices?
Business // Tuesday, October 3, 2006
|Private home prices accelerate in Q3|Gains in luxury segment begin to filter to broader market as economic growth gains momentum
Private home prices in Singapore rose by the fastest pace since the sector began recovering in the second quarter of 2004, as gains in luxury apartments began filtering into the broad market during the July-September quarter. The Urban Redevelopment Authority (URA) released yesterday
its preliminary estimate showing private residential property prices rose 2.5 per cent in the third quarter from the preceding quarter, accelerating from the 1.7-per-cent pace recorded in the second quarter. Compared with a year ago, private home prices rose about 7.3 per cent in the third quarter. "In the first six months, the mass market was slow because of concerns over rate rises. Rates are still going up but people are getting more bullish with regard to (economic) growth and unemployment," said Macquarie Securities analyst Soong Tuck Yin. Macquarie expects the recovery to gain momentum, with property prices rising between 5 and 8 per cent in the full year. Sias Research property analyst Roger Tan said: "I believe that property price gains are still very much concentrated around the high-end residential (sector), but I also believe that the mass market condos will soon enjoy price
increases as more en bloc sellers scramble to buy themselves a place to stay." Property developers have been buying older condominiums in recent months with the aim of knocking them down to build larger developments with more units. Such en bloc purchases generate a windfall for owners in that they receive more than what they would have gotten had they sold the units individually. Such deals also create a large pool of people with money in their pockets but nowhere to live. Singapore's economy grew 8.1 per cent year-on-year in the second quarter and is expected to expand between 6.5 and 7.5 per cent for the whole of this year, the Government said. Unemployment fell to 2.8 per cent at the end of June from 3.4 per cent a year ago. According to market estimates, prices in the luxury segment of Singapore's private residential market are up between 20 and
30 per cent from a year ago due to strong demand from foreign investors. But prices in the broader market had been relatively stable until recently, as higher economic growth did not result in an equivalent rise in wages, except for people working in certain sectors such as banking and finance. A separate index released yesterday by the Housing Development Board (HDB) showed resale prices of HDB apartments fell 0.2 per cent quarter-on-quarter after rising 1 per cent in the April-to-June period. The broad private residential property market has historically been driven by HDB owners looking to upgrade to private homes, but the latest data suggest HDB owners continue to be cautious in their outlook on property prices. Dow Jones
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