Property-cooling measures will stay for now and the right time to adjust or even lift some of the temporary initiatives is when the market equilibrium is a lot more certain and sustainable, said National Development Minister Khaw Boon Wan.
Private-home prices fell 0.9 per cent between April and June, continuing a slide for the seventh quarter running — the longest streak in 13 years.
However, in an interview with TODAY last Thursday (Aug 13), Mr Khaw said that while the property market is “a lot less hot” and price adjustment in certain sub-sectors of the private market, for example, has been drastic, there is “some distance to go” in other segments.
While the authorities are monitoring the sales and purchase data in both private- and public-housing markets, they are also scrutinising the trends and price movements in sub-sectors, he added. “So it’s not a straightforward (matter of) looking for a figure or a statistic, then you say, ‘Aha, we have arrived’, because the various moving parts are actually interlinked.”
Mr Khaw noted that structural and temporary initiatives, such as Additional Buyers’ Stamp Duty and loan-to-value limits, were among the several rounds of cooling measures rolled out by the Government.
“Measures have to be adjusted and perhaps even lifted, when it’s the right time. The right time is when the equilibrium is a lot more certain, more sustainable. And I don’t think we are at that point yet,” he said.
The external environment would also have an impact on Singapore’s economy and property market, he noted. A major factor is interest rates, and Mr Khaw pointed out that central banks all over the world had been talking about normalisation of interest rates for a long time. “It’s almost certain that the process towards normal will take a long time too.”
Adding that policymakers have been “lucky” with a property market that is “softening nicely”, Mr Khaw said: “It’s a complex system that we are part and parcel of. That’s why we have to watch carefully and, at various points, make some judgment calls.”
CONCERNS ABOUT OVERSUPPLY
The moribund housing market has set off a chorus of voices, especially from developers, calling for the property-cooling measures to be relaxed.
Last month, Monetary Authority of Singapore’s managing director Ravi Menon said it was premature to remove the cooling measures as the price correction had been modest, in the context of a 60 per cent increase in property prices over three years to reach their peak in 2013.
Amid concerns about an oversupply of public housing as the Government seeks to improve availability and affordability, Mr Khaw said there is “no policy to deliberately cause a glut”.
“What for? While a property bubble benefits no one, other than developers, a market collapse hurts everyone, with dire consequences for the rest of the economy,” he said.
After an unsustainable pace of construction in the past four years, the HDB has tapered the supply of new flats this year. “When I started this programme, I expected just two years of very intensive construction pace — practically with steroids,” Mr Khaw said.
Still, he said there has to be a “minimum level of construction pace”, regardless of the market condition.
“Because there will always be newly-weds... And if nothing else, the construction industry needs a certain minimum level of activities,” he said.