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16 Sep 2013

Property cooling measures necessary to avoid major price correction: MND

Source: Channel News Asis

The Ministry of National Development (MND) said the recent property cooling measures are still necessary and relevant to avoid a major price correction when economic conditions change.
Even though housing demand and price growth have eased, MND noted market activity remains robust and prices continue to rise.
It also noted interest rates remain unrealistically low.
The ministry said this in a written parliamentary response to Nominated MP Tan Su Shan.
Ms Tan had asked whether there is any risk of a policy overshoot in the recent cooling measures, which will lead to a protracted downturn affecting home owners in Singapore.
She added this is given the measures were taken before the collapse of emerging markets, which has led to investment outflows.
MND stressed the recent cooling measures aim to ensure Singapore's property market grows in a stable and sustainable way.
Collectively, it added the measures aim to dampen speculative buying and encourage prudence among home-buyers.
The ministry also noted the cooling measures were implemented, as Singapore's property market is affected by external economic developments.
In particular, the normalising interest rates could pose significant financial risks to individual borrowers and prudential risks to the overall economy.
However, the ministry also noted the situation is dynamic and said it will continue to monitor the housing market closely.

It will also review the cooling measures as economic conditions evolve.