The easing of property cooling measures will depend on many factors: Minister

The easing of property cooling measures will depend on factors such as the state of the economy, wage growth, and the situation in the property market, said Law and Foreign Affairs Minister K Shanmugam.


He was speaking at a real estate convention on Thursday (Jul 9), organised by property firm RE/MAX Singapore, in response to a question on a review of the cooling measures currently in place.

The question is one which Mr Shanmugam said he has been asked at almost every property convention he has been to, as housing prices continue to fall, and sales volumes remain low.

While the minister candidly admitted that he is not in a position to decide when to scale back the property cooling measures, he gave a glimpse into what could be some of the influencing factors.

"Somebody just told me they are all hoping that after the elections, it would be taken off,” said Mr Shanmugam, drawing laughter from the audience.

“But I don't know why people linked it to the elections. These cooling measures came in a long time ago, they either make sense or they don't make sense. And elections by itself is not a factor. What is, is the state of the economy, the state of supply and demand, the state of prices and the linkage to wages - those are the factors."

Mr Shanmugam also said the Government had introduced measures such as the Total Debt Servicing Ratio due to a "serious risk" of an overborrowing going into the real estate industry.

On the private property market, Mr Shanmugam said Singapore has to remain open to foreign investments in the property sector. But at the same time, private home prices must stay within reasonable reach for Singaporeans who aspire to own them.

"It's very difficult to explain it politically, because politically all the opposition has got to say is, 'You see these prices - they are sky high, you see the foreigners cavorting in Sentosa, it drives up the envy factor... They have got it, I don't have it’," said Mr Shanmugam.

"That's not the kind of conversation we used to have in Singapore. We used to say, ‘He's got it, but if I work hard, I can also have it’. Some people are turning that conversation now into ‘He's got it, I don't have it, why is he having it?’. So we have to point out that the reason why Singapore has been successful is because people were prepared to work hard," Mr Shanmugam added.

Turning to regulations in the real estate industry, Mr Shanmugam said there has been feedback from property agents, and his team has made some suggestions for the Council for Estate Agencies, the statutory board which licenses estate agents, to change some of its approaches and framework.

The one-hour dialogue also covered issues outside the property sector, ranging from the Greek crisis to the ASEAN Economic Community, and the impact of China's recent stock market plunge on the region.

Mr Shanmugam said the plunge may impact on the Chinese's liquidity and ability to invest: "China is now number one or number two in terms of investments into this region, and also in terms of trade, then it could have a real impact on the economies on all of us.” 

Source: Channel News Asia July 9,2015

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