Despite the economic slump as a result of the Covid-19 pandemic, the existing cooling measures for the property market will stay, the head of Singapore’s central bank said.
Mr Ravi Menon, managing director of the Monetary Authority of Singapore (MAS), said that this is because the property market has remained stable as a result of previous property curbs. There are also the temporary relief measures available for developers and homebuyers who have been affected by Covid-19.
“The adjustment of the property market has been modest. Property prices have moderated in an orderly manner in recent months,” Mr Menon said on Thursday (July 16) during the release of MAS’ Annual Report.
“The property cooling measures — progressively implemented over the last 10 years — have helped to temper price increases and bring prices more in line with underlying economic fundamentals,” he added.
Prices of private residential properties declined 1.1 per cent in the second quarter of this year, as shown by flash estimates published earlier by the Urban Redevelopment Authority.
Property cooling measures have been progressively rolled out almost every year since 2009, with the previous set of measures in 2018 effectively bringing down huge price hikes.
To help developers whose projects have been delayed by Covid-19, the Ministry of National Development has extended the schedule allowed to complete their projects by six months.
Couples looking to claw back the Additional Buyer’s Stamp Duty when buying a new private home will have one year, instead of six months, to sell their existing property.
Singaporean married couples buying a second home have to pay an additional 12 per cent of the property price as the stamp duty, but they can get a remission if they sell their first property in a year.
“The stabilisation of the property market has substantially reduced its vulnerability to the Covid-19 shock. If property prices had been rising rapidly as we entered the Covid-19 crisis, we could have seen a sharp and painful correction,” Mr Menon said.
He added that MAS, along with other government agencies, will continue to watch the market closely to ensure that prices for private homes remain in line with economic fundamentals.
When asked whether the spike in the sales of private housing units last month was an anomaly or a sign of a worrying trend, Mr Menon said: “Frankly, I don’t know.
“There are people who think (prices) might go up, there are people who think it might go down. On balance, it’s pretty much staying where it is. Month to month, you will see spikes, some of it is pent-up,” he added.
He also said that the authorities take a longer-term perspective on trends in the property market.
“We watch these trends very closely to see if they signify a persistent trend or pattern that might suggest a discontinuity, meaning a sharp collapse or a sudden surge. We need to now look at both possibilities and guard against it.”
Source: Today – 16 Jul 2020