Singapore acts to cool property market speculation

Immediate withdrawal of the interest absorption scheme

The Minister for National Development, Mr Mah Bow Tan, announced today three
measures the Singapore government would take to ensure a stable and sustainable
property market .

The first measure is the reinstatement of the Confirmed List for the 1st Half 2010
Government Land Sales (GLS) Programme. While there are still 16 residential sites in
the current Reserve List that can be triggered for sale by developers, MND will also
replenish the supply when drawing up the 1st Half 2010 Reserve List to meet possible
increases in demand. MND will announce the details of the 1st Half 2010 GLS
Programme towards the end of the year.

The second measure is the removal of the Interest Absorption Scheme (IAS) and
Interest-Only Housing Loans (IOL), with effect from today, September 14.

This measure will apply to all private
residential projects. The only exception will be uncompleted private residential
projects where the units had already been offered for sale under the IAS before
September 14, 2009. The IOL will be disallowed with immediate effect.

Genuine home-buyers can continue to purchase private housing under the standard
payment scheme.

Prior to today, the IAS and IOL were offered to buyers of uncompleted private
residential properties, and it is believed that these schemes could encourage property speculation. This is because under the schemes, a property purchaser will not have to
make any significant payment, apart from the upfront 10-20% down- payment, until the housing project is completed.

Meanwhile, the last measure is the non-extension of the Jan 2009 Budget assistance
measures for the property market when the measures expire.

These assistance measures from the Budget include allowing one-year extension of
project completion period, allowing re-assignment of Government Land Sale (GLS)
sites and private land owned by foreign developers, giving developers up to four years
to dispose of all private residential units in the development, allowing developers to
rent out unsold private residential units for a maximum of four years, and allowing up
to 2 years of property tax deferral for land under development.

The first four measures will expire on January 21, 2010, while the last measure will
expire on January 21, 2011.

Click below: Minister Mr Mah Bow Tan Video
Measures to curb property speculation outlined in Parliament

- CNA/sf
Posted: 14 September 2009 1433 hrs