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Single-digit fall in Singapore HDB resale prices next year still manageable: Khaw Boon Wan
MINISTER for National Development (MND) Khaw Boon Wan on Monday said he would consider a single-digit fall in public housing resale prices next year manageable and "a very good development".
"A soft single-digit is something the human mind, and employers, employees, the environment and the economy can adjust to," he told reporters.
Mr Khaw was witnessing the handover of the fifth completed block at the new Waterway Woodcress build-to-order (BTO) project. This also marks the meeting of its target of 28,000 new flats for 2014 - a record in recent years.
HDB resale prices, as at the end of Q3 2014, have fallen 6.1 per cent year on year.
Mr Khaw said he "took a very decisive step" to tilt the balance between buyers and sellers when he first joined the ministry.
"At that time, it was a little bit too predominantly a sellers' market. Now the balance is shifting and we expect it to continue to shift next year. I don't think it has stabilised yet."
He added that a soft downward adjustment, rather than a drastic market correction, of public housing prices would be healthy and not "painful".
"Drastic corrections are seldom good, because those are usually (due to) some external events, for example the Asian financial crisis, Sars, Ebola… so that yes, you may seemingly get cheaper prices in houses, but you might find yourself losing your job because it means the underlying economy is very fragile and brittle."
Mr Khaw also said, with no indication of any timeline, that some of the cooling measures are temporary.
"So obviously when the temperature becomes warmer, we have to adjust... Question is: when do you do that and how do you do that? So those are obviously issues of consideration next year."
He clarified that permanent measures refer to those that encourage prudence. The Monetary Authority of Singapore has set certain parameters, which can further be calibrated, he said.
"But the framework, I think it's the right framework. I think (the total debt servicing ratio) is not a wrong framework. In fact it's a good framework which now several other central bankers are also taking note of and some have already implemented their own version."
Asked what developers who are facing looming qualifying certificate deadlines can do besides offer buyers discounts, he replied: "I'm sure if they price it properly, there will be takers... There is genuine demand out there."