More measures to cool property market, if necessary: PM Lee
Singapore’s Prime Minister Lee Hsien Loong said more measures, if necessary, will be taken to cool the property market.
He was addressing 1,000 unionists at the labour movement’s National Delegates Conference on Monday.
Just last Friday, the government withdrew the deferred payment scheme for property purchases in a move to cool the booming property market.
But PM Lee said other measures will follow, if necessary.
“This step will help to dampen excessive speculation and to inject some reality into the market. But more fundamental than the ups and downs of the property cycle, the government is committed to keeping housing affordable for Singaporeans,” said the Prime Minister.
“We will continue to monitor the property market carefully and watch the trends. If necessary, we will continue to take more action… and make sure that the property market stays in balance over the long term,” he added.
The Prime Minister also added that the government is keeping a close watch on the financial markets, given the recent turmoil over the US housing credit crisis.
PM Lee said: “But the impact is not just the US sub-prime mortgages. It is much wider and has affected the financial markets around the world. There is nervousness and instability. Prices go down even on the Singapore market.
“So the big question is will this cause a recession in the US and affect the real economy. The answer is, ‘We can’t tell, maybe.’ The next question after that is, if there is a recession in America will it affect Singapore? That answer I can tell you is ‘Yes, it must affect Singapore.’ ”
Overall, though, the Prime Minister is keeping to a positive outlook, saying he is confident that Singapore can achieve the higher end of the 7-8 percent growth forecast for the whole of 2007.
Meanwhile, property consultants said the withdrawal of the deferred payment scheme, the new rules governing en bloc sales announced in September, as well as the US housing credit crisis are sufficient to keep the property asset bubble in check.
“We’re seeing a rebound in terms of the mass market and HDB market, so you don’t want to kill that market where the rest of the upper and mid tier have already run up. I think what the government should do is to hear the grounds and not overreact, in terms of introducing subsequent measures,” said Donald Han, MD of Cushman & Wakefield.
Most also don’t think that the current level of speculation deserves the same drastic measures implemented in 1996 - such as the imposition of capital tax gains.
Dr Chua Yang Liang, Head of Research & Consultancy at Jones Lang LaSalle said: “With regards to the level of speculation, the key thing to look at is the price increase. Is it sustainable? Looking at the overall economy, does this price increase matched with wage increases, GDP growth, employment numbers?”
Other cooling tools the government has in the bag, consultants said, include increasing property tax, higher stamp duty, or tightening home mortgage rules.
“What they should probably be concerned about is whether the current market increases the risk to the financial sectors. But I think the banks will be doing their own assessment as well. It’s best to leave the market to its own mechanism to try to find the balance,” said Nicholas Mak, Director of Consultancy & Research at Knight Frank.
“From the buyers’ point of view, I think it’s getting riskier now to speculate in the market and to look for short term gains. That’s because ultimately, investments in real estate should be a medium and long term investment.”
Market watchers said what’s key is not the measures themselves, but when those measures are implemented.
If wrongly timed, external factors like the US sub-prime mortgage issue, could prove to be a double whammy for the property market.
Source : ChannelNewsAsia - 29 Oct 2007
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