Singapore to Study Property Market Before Adding More Measures
Singapore will study the impact of existing measures to deter speculative property purchases before taking more steps to rein in prices, National Development Minister Mah Bow Tan said.
The government wants property prices to be “competitive” even as it seeks to ensure they are “in line with economic fundamentals,” Mah said in Parliament today. The steps that it has taken since September have cooled demand for private residential homes and the government will study the longer-term impact of the anti-speculative measures, he said.
Asian countries from South Korea to Singapore have introduced policies this year to contain rising real-estate values, which threaten to mimic the U.S. mortgage bubble that roiled the world economy. Singapore has barred interest-only loans for some housing projects and stopped allowing developers to absorb interest payments for apartments under construction.
“We want to curb erratic spikes in prices due to excessive speculation, inaccurate information or market manipulation,” Mah said. “But we must let market forces decide and determine prices based on genuine demand from homebuyers and investors.”
Singapore’s central bank said this month that it may be “necessary” to implement more measures to counter real-estate market speculation. The Monetary Authority of Singapore said Nov. 9 that demand for private homes has experienced “strong growth” and unchecked price gains may expose the property market to risks in the global economy. There should be “close monitoring” of home prices and transactions, it said.
Cooling the Market
The government is releasing more land for sale in the first half of next year as part of measures to prevent excessive price swings in the property market, Mah reiterated today.
Singapore’s private home transactions have declined since peaking in July after rebounding demand and improving economic conditions boosted sales in the seven months through July to 10,000 units. Still, home prices rose 15.8 percent in the third quarter, the most in 28 years, after dropping 25 percent in the previous four quarters.
The measures the government have imposed are not a “blunt” instrument aimed at all buyers, Mah said.
“They are mainly targeted at speculators who would make use of these schemes to turn over properties quite rapidly,” he said. “The idea is to cool the market, not crash it.”
Singapore’s housing market has “a lot of supply” and the government is committed to ensuring sufficient public housing, the minister said.
Filed under: economics by Wolf