Singapore government to ensure property market is in line with economic fundamentals

THE Singapore government is monitoring the developments in the property market "very closely", and will adjust policies if necessary, to maintain a stable and sustainable property market for Singaporeans, said National Development Minister Desmond Lee.

Speaking at the Building and Construction Authority-Real Estate Developers' Association of Singapore Built Environment and Property Prospects Seminar 2021 on Monday, Mr Lee said that the government has, over the years, put in place several measures to ensure that prices in the private sector housing market move 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," he said.

This comes as the pace of increase in private housing prices has gathered momentum since the second quarter of 2020, with developers' sales at recent project launches being robust.

For instance, on Sunday afternoon, developer Kingsford Huray Development said that a third of the residential units offered at Normanton Park were sold at an average price of S$1,750 per square foot on the first day of sales.

The Business Times also earlier reported that developers are poised to continue their new project launch momentum this year. Despite the pandemic, the number of private housing units launched in 2020 was only 4.1 per cent fewer than in 2019.

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

However, he noted 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 recovery in the domestic labour market.

"Developers should continue to remain prudent in land bidding and work with agents to market their projects responsibly to allow buyers to make considered decisions that take into account their needs and affordability."

He added that households also need 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," said Mr Lee.

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