The experts at the Monetary Authority of Singapore recently said that they would stay vigilant about possible rises in property prices, even if the market is not overheated. Mr. Menon revealed that the Singapore property market has been very resilient during the pandemic and the recession period; however, it shows an uncertain movement during the Covid-19 caused risks of the current year as well.
Stats reveal that gross domestic product and economy contracted by a considerable level in 2020; however, the residential property price index improved by 1.6%. During the first quarter of the year 2021, the PPI was observed to be around 5.6% higher as compared to the pre-pandemic level.
The fast recovery of the residential property market in Singapore is giving birth to some speculations regarding the implication of cooling measures first time after 2018. However, Mr. Menon said that the government’s strategy is to prevent overheating of the market, and they are watching it closely.
It is important to mention that authorities will never make it clear in advance if they are planning to implement cooling measures because it will automatically defeat the real purpose of this decision. So, people just need to watch the scenario and hope that market will stay stable after all these economic ups and downs.
The Ministry of National Development and Urban Redevelopment Authority, along with the Monetary Authority of Singapore, is likely to observe everything very actively to handle the sudden rise in prices in comparison to the income trends. Mr. Menon recently said that the long-term divergence between prices and income levels is unsustainable in relation to market stability, and it also appears undesirable from a housing affordability perspective.
It is observed that this tiny beautiful island is always cautious about too far movements of land prices in comparison to the economic fundamentals. However, the government is extra vigilant this time because the covid-19 pandemic has already posed considerable harm to the market and economy. However, the market conditions are changing and uplifting shortly. The interest rates are currently at rock bottom; the social distancing measures are easing, people are opting for vaccination, and the economy is about to expand between 4 to 6% after the recession. At the same time, the government is maintaining tight control on the land sales program while stoking raw material-related demands.
The residential property market in Singapore is a global asset class with positive local political dimensions. The government needs to maintain a clear eye on public housing. The foreign currency deposits are slowly improving, and the property values may also enhance steadily. The extra stamp duties may also impact the market; therefore, interested investors are looking for ways to invest. People are even ready to invest in multiple homes, and it may lead to the better economic recovery of the city and state real estate market. However, among all these expected growth possibilities in the market, the government is keeping an eye on risk factors as well.
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