Effects of the Recent Property Cooling Measures

Ms Tan Su Shan asked the Minister for National Development given the recent measures to cool the property market that were taken before the collapse of emerging markets which has led to investment outflows, whether there is any risk of a policy overshoot in the cooling measures that will lead to a protracted downturn affecting home owners in Singapore.

Mr Khaw Boon Wan: The cooling measures aim to ensure that Singapore's property market grows in a stable and sustainable way. Collectively, they act to dampen speculative buying and encourage home-buyers to exercise prudence before committing to a property purchase.

Although housing demand and price growth have eased, market activity remains robust and prices continue to rise, as interest rates remain unrealistically low. The cooling measures therefore are necessary and relevant to avoid a major price correction when economic conditions change.

External economic developments impact Singapore's property market. In particular, normalising interest rates could pose significant financial risks to individual borrowers and prudential risks to the overall economy. That is why the cooling measures were implemented. It is, however, a dynamic situation and we will continue to monitor the housing market closely and review the cooling measures as economic conditions evolve.