Property cooling measures: Why cautionary stance still needed

WITH the latest residential data showing signs of a bottoming out in prices in the second quarter, it comes as no surprise that the Monetary Authority of Singapore (MAS) has reiterated that it is too early to unwind property cooling measures.

The MAS move is understandable if one looks at it this way: it is better to err on the side of caution and let the soft landing process takes its course than to risk sending a wrong market signal and reverse the needed price correction that has been painstakingly achieved through many rounds of cooling measures.

The signs of firming in the property market could be a combination of various factors including pent-up demand and speculation of easing of cooling measures. But without any clear signs of an economic upturn - not just at home but globally as well - a continued cautionary stance is still necessary.