Property cooling measures ‘can’t be discounted’: DBS CEO

The possibility of the Government introducing tightening measures to cool the property market “cannot be discounted”, said DBS chief executive officer Piyush Gupta who noted that certain government agencies are “getting nervous” about the situation.

Speaking on Thursday (July 5) at a luncheon on the bank’s market outlook for the second half of the year, Mr Gupta was referring to the previous day’s warning from Monetary Authority of Singapore (MAS) managing director Ravi Menon about exuberance in the property market.

“The MAS is getting nervous,” said Mr Gupta. “And also, from my understanding is the URA (Urban Redevelopment Authority).”

On Wednesday, Mr Menon advised developers, home buyers and banks to exercise caution amid “euphoria” in the current property market. Mr Menon said that while the recovery seen over the past few quarters is welcomed, the rise in property prices should be in line with economic fundamentals and not get ahead of income growth. “There is euphoria now. Everything looks good… Basically, we’re sounding cautions to everyone to be sober, to be balanced and exercise good judgement,” he said at a briefing on the central bank’s annual report.

Since 2009, several rounds of property cooling measures have been introduced, although some have been rolled back. The Total Debt Servicing Ratio framework, for example, remains in place.

Private property prices declined for four straight years between mid-2013 and mid-2017, before turning the corner. On Monday, URA statistics showed that property prices have risen to the highest since 2014.

While property analysts had earlier said it was premature for the authorities to intervene in the market, Mr Gupta believes the Government wants “to make sure that like they did the last time, they stay ahead of the curve”. “I do think it’s something to keep an eye out on,” he added.

Source: Today – 5 Jun 2018

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