Property developers and homeowners hoping that the cooling measures will be relaxed soon will have to wait longer after the Monetary Authority of Singapore (MAS) said it is still premature to ease the policies, reported Today Online.
“Property prices have softened somewhat, but like I said last year, in the context of the price increase that had occurred — 60 percent over three years — the softening we have seen is really not all that much. So, it’s still premature to consider removing any of the cooling measures that are in place,” explained MAS managing director Ravi Menon at a media briefing on Tuesday.
Private home prices started climbing steeply in mid-2009 before peaking in Q3 2013. The introduction of the Total Debt Servicing Ratio (TDSR) framework in June 2013 saw the market gradually decline.
Based on flash estimates by the Urban Redevelopment Authority (URA), prices of private units dipped 0.9 percent in Q2, or the seventh consecutive quarter of price falls since the 2013 peak. However, prices corrected by less than seven percent from their record high.
“It is fair from the point of view of a policy stance aimed at re-engineering home affordability. The property market cooling is happening in an orderly fashion, and it is prudent to allow this to continue,” said Barclays economist Leong Wai Ho.
Meanwhile, Century 21 chief executive Ku Swee Yong wasn’t surprised by Menon’s comments.
“Based on the still-strong reaction from developers to Government Land Sale tenders and the decent response to some of the new launches, this is probably not the correct time to be easing curbs,” he noted.
Menon’s views mirror that of Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam and National Development Minister Khaw Boon Wan.
Last October, Mr Tharman stated that “prices have some distance to go in achieving a meaningful correction”, while Mr Khaw mentioned it was not the right time to ease the cooling measures since there is still room for property prices to moderate.
Romesh Navaratnarajah, Singapore Editor at PropertyGuru, edited this story. To contact him about this or other stories email romesh@propertyguru.com.sg
