The number of foreigners owning private property in Singapore has increased 16% in the first half of 2011, the latest government figures reveal.
This increase compares with a rise of just 12% for the whole of 2010 and has raised concerns that overseas owners are pricing out local people from the housing market.
However, National Development Minister Khaw Boon Wan told parliament that despite the growing demand from foreigners, locals still account for more than four fifths of all private home purchases this year.
He said recent cooling measures are having a clear impact though the full effects will take some time to achieve. While the private housing market is still rising, the rates of price increase have been trending down since the third quarter of 2009.
So far this year, prices have increased by 6%, much lower that the 18% recorded in 2010. For successful Singaporeans who aspire to own private properties, Khaw said the government will ensure an adequate supply of land for such developments.
‘In response to strong demand, we have ramped up supply of land through the Government Land Sales programme. This year, we are releasing land for over 14,500 units to the market, compared to 10,000 units last year,’ he explained.
Currently there are around 34,000 unsold private housing units, equivalent to more than two years of demand. ‘We will keep up the land sales programme until the market stabilises fully. The new supply will take time to come on stream, but over time it will help stabilise our private property market,’ added Khaw.
He stressed that rising property prices cannot be attributed solely to foreign purchases. He pointed to other factors such as low interest rates and Singapore’s strong economic fundamentals. But the government does not rule out taking further measures if the situation calls for it.
He also pledged to build more affordable housing. Khaw said the country’s supply of rental flats will soon reach 47,000 and another 3,000 units will be added next year.
‘As we build more rental flats, we must ensure that they are safeguarded for poor and needy households who cannot afford to own a home, have no family support, and do not have other housing options. It is important that HDB maintains strict rules and criteria to do so. Nonetheless, HDB will exercise flexibility to help those who do not meet the rules but worthy of consideration,’ he added.