Singapore property stabilizing, cooling measures stay for now: finance minister

Wed Jul 10, 2013 7:27am EDT
 
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SINGAPORE (Reuters) - Singapore's hot property market has shown signs of stabilizing but the government would like to see some softening of prices and is not ready to relax its cooling measures just yet, Finance Minister Tharman Shanmugaratnam said on Wednesday.

Singapore, along with many other countries, has been concerned about the effect of low global interest rates and high levels of liquidity on its asset markets, especially the property sector.

In a series of cooling measures since 2010, the government has aimed at "preventing a full-scale bubble from being formed because that can only crash but at the same time not overreacting in one set of moves," Tharman, who is also chairman of the central bank and a deputy prime minister, told Reuters.

"Our intention is to stabilize the market, if possible have some softening of prices," he said in an interview.

"Longer term, our intention is to try as best as we can, although it's difficult, to have prices not run away from incomes."

Home prices in the wealthy city-state rose for a fifth straight quarter in the three months to June. Analysts said owners and developers of private apartments in the outer suburbs appear most at risk if the market corrects.

In the latest move, the central bank recently introduced rules to ensure a buyer's monthly payments do not exceed 60 percent of income, a move designed to ensure investors are not caught out by a rise in interest rates.

"The market as a whole is seeing some stabilization," Tharman said. "We're not ready yet to lift our measures or ease up on our measures so we're watching the market and have to make judgments without announcing our policy moves well in advance."

A slowdown in property price appreciation was "more than temporary" and was a "response to our measures", he said.   Continued...

 
IMFC Chairman Tharman Shanmugaratnam speaks at a news conference during the Spring Meeting of the IMF and World Bank in Washington, April 20, 2013. REUTERS/Yuri Gripas