In reply to Member of Parliaments' suggestion that the government adjusts the Additional Buyer's Stamp Duty (ABSD) especially for Singaporean buyers when the republic is ready to unwind the cooling measures, National Development Minister Khaw Boon Wan said that he wants a "soft landing" for the housing market as "a market crash benefits no one".
Earlier, West Coast GRC MP Foo Mee Har had warned of the need to ensure that "these well intended corrections are not overdone".
"Given the huge new housing supply yet to hit the market and the impending rise of interest rates, we must be cautious that this downward price trend does not inadvertently get into a momentum and reach an unintended pace... Some industry players have told me that this is easier said than done. Their concern is that once a downward momentum begins, the downward pressure on prices may not be so easy to control as we have seen in previous property cycles."
Nee Soon GRC MP Lee Bee Wah also said that while the ABSD started out as an initiative to discourage unnecessary ownership of multiple properties, it has led to Singaporeans now investing in riskier foreign properties.
"Coupled with low initial downpayments, and fewer restrictions in foreign property, Singaporeans are enticed to look abroad. This not only does little benefit to our economy, but puts our people at risk, I feel we should keep the Total Debt Servicing Ratio (TDSR) to encourage prudence in finance spending, but remove the ABSD for Singaporeans so they can invest in properties in Singapore."
In his speech, Mr Khaw acknowledged that the government "should not go into overdrive, and unwittingly undermine the retirement plan of our seniors who look to their housing assets for monetisation".
"The property market is in transition and it is a time that calls for vigilance and nimbleness. We will be careful."
He went on to share data to show that the ministry's efforts in taming the housing market has seen results.
He said the current property cycle has picked up from its trough in 2009. Between 2009 and 2014, HDB resale prices rose and peaked in 2013, but have since eased to 37 per cent above the 2009 level. Over the same period, Singaporeans' median household income has caught up, rising by 38 per cent.
In her speech, Ms Foo had also asked: "At which point will cooling measures be eased in order to cushion any excessive price corrections?" But Mr Khaw did not address this question.