The Singapore government is closely monitoring the local housing market which is currently in a correction phase, said Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam and reported by Bloomberg.
Speaking at an Economic Society of Singapore event last Friday, he revealed that the government tried to cool the market after home prices witnessed five to six years of “sharp up-cycle”. Last month, official data showed that new home sales plunged 42 percent in June from May to this year’s lowest level.
“We went about it in a very determined way in the past four years,” said Tharman of the measures put in place to cool prices.
“We’ve succeeded in tempering the market, it’s now in a phase of correction. But we’re still watching it very closely,” he noted.
Home prices in Singapore have fallen for seven consecutive quarters through to June as stiffer mortgage rules cool demand.
“Housing is critical, a unique part of the Singapore story,” noted Tharman. “The Asian markets always go through these cycles in the property market, and you’ve got to do something to temper it.”
The government began implementing property curbs in 2009. Since then, measures combating low interest rates, which attracted demand from foreign buyers, have increased to include higher stamp duties on residential acquisitions and a cap on debt repayment at 60 percent of the borrower’s monthly income.
Romesh Navaratnarajah, Singapore Editor at PropertyGuru, edited this story. To contact him about this or other stories email romesh@propertyguru.com.sg
