The government’s recent property cooling measures are relevant and necessary to avoid a major price correction once economic conditions change, explained the Ministry of National Development (MND).
It noted that market activity continues to be strong despite the slowdown in housing demand and price growth. In fact, prices continue to climb while interest rates remain unrealistically low.
This written statement was issued in Parliament in response to a query by Nominated MP Tan Su Shan, who asked if there is any risk of a policy overshoot with regards to the latest curbs, which could result in a protracted downturn affecting homeowners in Singapore.
Ms Tan said this is given the measures were taken before the collapse of emerging markets which has led to investment outflows.
MND noted that the cooling measures were introduced to ensure that the property market grows in a stable and sustainable manner. Collectively, they serve to encourage prudence amongst buyers and dampen speculative activity.
The measures were also implemented as external economic developments affect the country’s property market.
Specifically, the normalising of interest rates could present significant financial risks to buyers as well as prudential risks to the overall economy.
However, it is a “dynamic situation, and we will continue to monitor the housing market closely, and review the cooling measures as economic conditions evolve”, MND said.
Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories email romesh@propertyguru.com.sg
Related Stories:
Govt to look into ownership rights of underground space
Push for green building solutions: DPM Teo
Govt looking for more possibilities underground