Singapore to retain home curbs for some time

Prices fall: A file picture showing private residential buildings in the Orchard Road area. Singapore home prices dropped 3 in 2016, with prices declining for the 13th straight quarter in the last three months of the year. – Bloomberg

SINGAPORE: Singapore’s residential property curbs are expected to stay for some time as the city-state’s economy remains stable and demand is still “very resilient,” National Development Minister Lawrence Wong said.

Singapore home prices fell 3% in 2016, with prices declining for the 13th straight quarter in the last three months of the year for the longest streak since data was first published in 1975. Still, Singapore house sales last year topped 2015’s tally as a third straight year of price declines stoked pent-up demand from homebuyers.

The cooling measures “have helped to achieve a soft landing in the property market,” Wong, who’s also the second finance minister, said in a Bloomberg Television interview with Haslinda Amin.

“If you look at the market today, demand remains very resilient.”

Singapore’s government has been steadfast in its commitment to cool the housing market, maintaining real estate curbs rolled out since 2009, with some of the strictest measures implemented in 2013.

The government has repeatedly signalled it is reluctant to ease property curbs, including capping debt repayments at 60% of a borrower’s income and higher stamp duties, as it wants to avoid overheating the market again.

Singapore’s residential property curbs are set to stay in place for at least another year amid signs the city’s housing market is stabilising, the chief executive officer of CapitaLand Ltd, South-East Asia’s biggest developer said in an interview earlier this month.

“We see volume picking up and the price declines have slowed,” Lim Ming Yan, the president and CEO of CapitaLand, said on Feb 15.

“We see this trend continuing for 2017. There is no compelling reason for the government at this point to make major changes” to property curbs, he said.

Singapore, which outlined its annual budget on Monday, is studying measures to boost revenue, including higher taxes, to help ease pressure on the budget as spending increases, Wong said in the interview.

Wong also said that he doesn’t anticipate a China-US trade war, but the risk of one is “real” and Singapore should be prepared for the eventuality and its aftermath.

“The impact would be very significant, not just for us but for countries around Asia,” he said.

“Trade accounts for more than three times Singapore’s gross domestic product. – Bloomberg