Recently, there was an event at The Ritz-Carlton Millenia, where Mr Lawrence Wong, Minister for National Development of SIngapore explained why the Government adopted the measures that became active in July, concerning the property market of Singapore. As Mr. Wong said, these cooling measures have the purpose to avoid bubbles on the market and keeping the prices stable at the same time. The property market should evolve according to the trend outlining income increases and follow certain economic fundamentals, this is why the Government will not accept a hands-off attitude when it comes to the real estate sector of Singapore.
The previously mentioned event took place with the occasion of the 59th anniversary of the Real Estate Developers’ Association of Singapore, celebrated with a festive dinner. It was also a very good opportunity for the participants to catch up with the latest news and consolidate their relationships. Of course, Mr. Wong, who represented the Singaporean Government at the event, wanted to let everybody know that the Government will continue to intervene in the property market of the country when and if needed, in order to maintain stability in the property cycle. Thus, no one should be caught by surprise if the authorities will launch measures or decide to make certain adjustments.
Mr. Wong added that the goal of the Government, through the adopted measures, is not to lower the prices of properties on the market. The aim is to stabilize the prices and maintain a balanced market, where prices go hand in hand with the levels of income. He also said that if the Government wouldn’t have launched the well-known cooling measures in July, a series of unwanted occurrences would have happened on the real estate market. Without the cooling measures, there was a high chance, considering the way the market evolved, for prices to exceed an increase of 10%, even 15%, this year. Also, the price increase would have continued in the following year as well. After every significant increase, a crash comes, something that may have happened in 2 to 3 years without the measures, affecting a good number of Singapore’s citizens.
So, the prices can grow, but they should grow at a pace that is according to the fundamentals of good economics, and not faster. Fast growing prices on the real estate market trigger unbalance, which are much more difficult to correct once they happen. According to Mr. Wang, the intervention of the authorities happened after prices increased sharply in a very short period. So, it was something that had to be done in order to keep prices within the normal and natural range of the market. He also tried to calm down the developers that participated at the event, telling them that the approach adopted by the Government is a responsible one that will provide advantages to everyone. Thus, they should do their best to understand and appreciate interventions that are trying to keep the real estate market healthy and thriving.
In response, Mr. Augustine Tan, who is the president of REDAS, said that the volumes of sales in the real estate sector became uncertain since the cooling measures were launched in July. Also, even if there were a good number of sales for new launch condos and resale condos in July, up to the point where the measures became active, it doesn’t mean that the demand can be outlined according to the volume of those sales. Most certainly a stable property market is to the benefit of everybody and soon everyone will understand that the adopted measures are helping, instead of being counterproductive.
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