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Singapore government to kick-start deferred property projects

Medium-sized public projects worth up to £3 billion are being examined and the work is likely to go to smaller contractors and developers who are suffering the most from the economic downturn.

'We are looking at a number of projects and seeing how we can bring forward some of those that have been deferred,' said Mah Bow Tan, minister for national development.

Those that will begin again are to be announced in the New Year. They are likely to include projects that have been halted in the past 12 months such as an extension to the Changi prison, a national art gallery and the Jurong general hospital.

The minister also said that plans are under way to encourage banks to help contractors through periods of tight credit.

Although the residential property market has slowed there are no signs of distressed sellers yet although the government is ready to help if the situation deteriorates further.

At present many buyers are adopting a wait and see attitude. 'Most are not feeling any pain from the recession yet. In the secondary market, many sellers are still hoping to do sub-sale at a profit. There are no major price reductions yet,' said Nicholas Mak, director or research at Knight Frank.

But there could be a rise in the number of speculators desperate to get rid of their properties because they do not want to be saddled with huge loans, experts say.

These are people who bought properties when the market was booming under the deferred payment scheme, which means they will have to pay the full sum for the property upon completion.

The Government has said some 10,450 units of private homes sold under the deferred payment scheme have yet to be completed. Around 2,540 units, largely bought during last year's property boom are expected to be completed in 2010.