Singapore government keeping close watch on property market

Singapore

THE Singapore government is paying "close attention" to the local real estate market "to ensure that it remains stable", said Deputy Prime Minister Heng Swee Keat.

This is because "we must continue to enable young Singaporeans to own their homes and fulfil their aspirations", Mr Heng noted in his speech at the Real Estate Developers' Association of Singapore's (Redas) 61st anniversary celebration on Monday.

He pointed to rising asset prices around the world despite the economic impact of the Covid-19 pandemic. Likewise, Singapore's local property market is "starting to see renewed positive sentiments and some gathering of momentum in prices", added Mr Heng, who is also Minister for Finance.

"We will remain vigilant as the economic outlook remains very uncertain. We do not want to see the property market run ahead of the underlying economic fundamentals."

Mr Heng's comments came hours after National Development Minister Desmond Lee similarly said at another event that the government is monitoring the property market "very closely".

The government will adjust policies if necessary to maintain a stable and sustainable property market for Singaporeans, according to Mr Lee, who was speaking at a seminar organised by the Building and Construction Authority and Redas on the built environment's 2021 prospects.

Over the years, the authorities have implemented several measures to ensure that prices of private homes moved in line with economic fundamentals. "This is to ensure that the property market remains resilient to economic downturns, property bubbles and external shocks like the pandemic," said Mr Lee.

The uptrend in private housing prices has picked up pace since Q2 2020, even as the economy entered a downturn while the Covid-19 outbreak escalated.

Developers are also expected to continue their new project launch momentum this year, The Business Times reported. Despite the Covid-19 crisis, the number of private housing units launched last year was just 4.1 per cent lower than in 2019.

"With developers' inventory of unsold units progressively coming down, there has been healthy bidding interest in recent government land sales tenders," Mr Lee said.

He added that developers should continue to stay prudent in land bidding, and work with property agents "to market their projects responsibly to allow buyers to make considered decisions that take into account their needs and affordability".

Some analysts recently flagged the possibility of fresh cooling measures if developers begin to bid aggressively for land, including collective sale sites, BT reported. This is because high land bids are typically followed by property sellers pushing up their end-unit prices.

Mr Lee also noted on Monday that Singaporeans need to remain vigilant, as the property market is not insulated from ongoing uncertainties in the global economic outlook nor setbacks to the domestic labour market's recovery.

He urged households to exercise caution in their property purchase decisions: "Given the uncertain economic outlook and possible rises in interest rates, buyers should be mindful of their ability to service long-term mortgage obligations before making long-term financial commitments."

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