Property measures aimed at encouraging financial prudence: Mah

National Development Minister Mah Bow Tan has said the government will continue to monitor the property market closely and take further steps, if necessary, to promote a stable and sustainable property market.

Replying to a question in Parliament on Monday, he explained that despite the large supply in the pipeline, market sentiments had remained bullish, with signs of renewed exuberance in the market at the end of last year and the majority of the buyers being Singaporeans.

Mr Mah said the government was particularly concerned that low interest rates plus excessive liquidity in the financial system, both in Singapore and globally, could further drive up demand for private housing.

And this could in turn cause prices to overshoot economic fundamentals.

Furthermore, purchasers who over-extended themselves financially may be caught when interest rates eventually rise, and they may be forced to sell their properties at an inopportune time.

Thus the government had introduced additional measures in January this year to preempt a property bubble from forming.

Mr Mah said these measures aimed to temper demand and encourage greater financial prudence among property purchasers.

Source : Channel NewsAsia – 14 Feb 2011