SINGAPORE — Cooling measures targeting the private property market have dampened foreign demand and reduced speculation as intended, said Minister for National Development Khaw Boon Wan in Parliament yesterday.

Responding to Member of Parliament (MP) for Holland-Bukit Timah GRC Christopher De Souza’s question on whether the cooling measures have been effective, Mr Khaw revealed that foreign buying in the private housing market has shrunk, both in proportion and in absolute numbers since 2011.

In December 2011, the Government had announced that foreigners are required to pay a 10 per cent Additional Buyer’s Stamp Duty, on top of the existing Buyer’s Stamp Duty, on all property purchases here.

The proportion of private property purchases made by foreigners has fallen to 7 per cent as of September this year, compared to 17 per cent in 2011.

In absolute numbers, purchases made by foreigners have fallen to 330 in the third quarter of this year, from about 1,400 per quarter.

Mr Khaw also said sub-sale transactions have fallen sharply from 670 per quarter (7.6 per cent) in 2011, to 181 in the third quarter of this year.

Sub-sales usually take place before a project has been completed and are an indicator of speculative activity.

When asked if greater ownership restrictions on foreigners, similar to the system in Australia, would be better than the collection of measures the Government has implemented to create sustainable property prices, Mr Khaw said “there isn’t really just a single measure or bullet that will solve the problem”.

Even Australia has had to deal with a property bubble recently, he added. “So we do require a basket of measures and integrate and calibrate them in a way which achieves a particular outcome.”

As Singapore’s property market is a small one that is plugged into the global system, Mr Khaw said it is subject to many external factors “beyond our control”. “That’s why, although the member (Mr De Souza) described our measures as ‘ad-hoc’, I’m afraid that is part and parcel in this game of managing our property market. You have to be nimble and try to anticipate somewhat.”

The minister also reiterated that the Government’s priority is to support home ownership for Singaporeans.

Under its policies, only Singapore citizens are allowed to buy new Housing and Development Board (HDB) flats and are provided grants to purchase resale HDB flats, while “almost all” landed housing can only be purchased by Singaporeans.

While he noted that the private condominium market is open to foreigners, Mr Khaw said the cooling measures have moderated their impact. “We continue to closely monitor the market and will not hesitate to act further when necessary,” he added.