Cooling measures working in some Asia-Pacific markets, including Singapore: S&P housing report

COOLING measures and an accommodative monetary policy have helped to control house-price inflation in Singapore among other Asia-Pacific nations, a housing report published by S&P Global Ratings (S&P) on Thursday has found. 

The study noted that mortgage credit expanded across the region, albeit at a slower pace compared to six months ago, while monetary policy remains highly accommodative - which has lowered mortgage interest rates, and eased mortgage financing conditions. 

"At the same time, cooling measures have been imposed to tame house prices in place in several markets in the region. These policies have had some success in controlling house price inflation in China and Singapore," economists at S&P said. 

Among other things, the report also highlighted that public housing in Singapore is still undergoing "mild price declines", while the private residential market improved in the first quarter this year following a long period of price falls.

Said S&P Asia-Pacific economist Vishrut Rana: "Out of the markets we cover, prices in the latest quarter only fell in three places: mainland China's tier-one markets, public housing in Singapore, and Sydney."

Australian residential property markets appear to have slowed, particularly in Sydney, where additional housing supply is in the pipeline, the report said.

"Several residential market indicators including residential transactions and housing starts are showing cyclical downturn. Macroprudential policies have been effective in slowing down new mortgage borrowing, particularly by investors."

In China, tight house-price cooling measures in tier-one cities led to property prices decreasing slightly for the first three months this year, and cooling measures in tier-two cities while milder than those in tier-one cities, remained very stringent, S&P said.

Although mortgage credit growth has slowed partly due to these measures, China's residential mortgage market is still expanding at the fastest rate in the region, the report noted. 

Conversely, stringent price-cooling measures in Hong Kong have not been very effective in slowing house-price inflation due to strong property demand.

"Hong Kong's residential property market stands out in the region for being unstoppable," said Mr Rana.  

Nonetheless, taken together, residential property markets in the Asia-Pacific region have remain resilient since October - thanks to favourable economic conditions, tight labour markets, and an accommodative monetary policy, S&P noted.