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(SINGAPORE) The Central Provident Fund Board's changes to schemes relating to property purchases may have little impact on the market, but some will lament lost opportunities for investment nonetheless.

Second property: Most people using their CPF savings for a second home buy private residential property because it is seen as an investment, says Mr Mohamed of Propnex

Perhaps spurred by the impending demise of the Non-Residential Property Scheme (NRPS) - which allowed Central Provident Fund (CPF) members to use their savings to buy commercial property - a CPF spokesman said 760 people had applied for the scheme since its abolition was first mooted a year ago. The number of people may be small, but it is an increase of 68 per cent from the year before when 453 applied.

The CPF Board decided to drop the NRPS because under the CPF Investment Scheme, members can still invest in commercial property. In addition, CPF said the take-up rate of NRPS had been low and the number of new applications had declined over the years.

It is not known what type of commercial properties have been bought under NRPS, which allowed for a wide range, including offices, shops and industrial space. Chesterton International's head of research and consultancy Colin Tan says it is more likely to be office space. 'The jump in numbers could be due to higher numbers buying strata offices as the very positive market sentiment during that period was that office properties are finally on their way up and in a big way.'

CPF figures also show that the number of members who had used CPF savings to buy more than one property was surprisingly small - 50,337 as of May this year. This represents 3.4 per cent of all CPF members under the housing scheme - about 1.46 million.

From July 1, CPF has introduced new restrictions on the use of savings to buy second (or more) homes, and this too will give people fewer investment options.

As of March 31, the number of members who had taken part in CPF's Public Housing Scheme was about 1.3 million. The net amount withdrawn was $75.6 billion. The number of participants in the Residential Properties Scheme - for private property - was less at 218,000, though the net amount withdrawn was $43 billion. Almost $120 billion has been used to buy property, but this will change in the future.

Propnex chief executive Mohamed Ismail reckons most people using their CPF savings for a second home, especially those who live in public housing, buy private residential property because it is seen as an investment. 'An HDB flat is not seen as a second property.'

Still, to what the extent the intended effect of this restriction - which is to curb over-investment in property - is realised will depend on Singaporeans' appetite for property investment. And some are hungry.