A few speculators forced housing curbs: Hwee Hua

Published December 6, 2010

A few speculators forced housing curbs: Hwee Hua

THE government had to introduce cooling measures to curb speculation in the public housing market due to a small group of private property owners, says Lim Hwee Hua, Minister in the Prime Minister's Office.

She was responding to questions at a dialogue session yesterday morning, which was part of a community visit to Kampong Chai Chee.

'(The Housing and Development Board's) feedback to us is that, for resale flats, the Cash-Over-Valuation (COV) is rising all the time. So HDB and the Ministry of National Development looked at what's causing this to rise and who are the participants in the market,' Mrs Lim was quoted by the media as saying.

'They realised that there is a group of private property owners, a small percentage who speculate (on) the properties . . . and this has caused prices in certain areas to rise faster.'

Cooling measures were announced some months back, such as extending the holding period for the seller's stamp duty to three years.

The minister added: 'It's not a restriction on private property owners but a whole series (of measures) to cool the market down. And the starting point is meeting the needs of Singaporeans who would like to own a flat.'

HDB has said that it plans to launch up to 22,000 flats in 2011 if strong demand persists.

Other issues that came up during the dialogue included the Lehman Brothers minibond debacle, which underlined the need for stricter financial regulation.

'The Monetary Authority of Singapore (MAS) has imposed stricter regulations. So the tightening of regulations is one important aspect. The other area is that of compensation - how much compensation there should be,' she was quoted as saying.

MAS also worked together with all the banks to set up a process whereby investors can approach the banks where they bought the bonds to submit a request for compensation.

'The banks would have to decide whether the investor, at the point of making the investment, was misled. And some of them have gotten the full compensation. A lot depends on how knowledgeable the person is at the point of investing. That is how MAS approached the whole problem with all the banks,' Mrs Lim said

Source: www.businesstimes.com.sg