Factors backing property demand to stay: Lawrence Wong

Singapore private home prices fell 3 per cent in 2016, the third straight annual decline, as the government held steadfast on its cooling measures.
Singapore private home prices fell 3 per cent in 2016, the third straight annual decline, as the government held steadfast on its cooling measures.PHOTO: ST FILE

SINGAPORE (BLOOMBERG) - Singapore’s property demand remains “very resilient”, supported by factors including low interest rates and a stable economy, National Development Minister Lawrence Wong said.  

“Our economy is still growing, so I think demand is still healthy and our assessment is these factors will remain for some time,” Mr Wong, who’s also the second finance minister, said in a Bloomberg Television interview with Haslinda Amin.  

Singapore home prices fell 3 per cent 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 home buyers.  

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 signaled it is reluctant to ease property curbs, including capping debt repayments at 60 per cent of a borrower’s income and higher stamp duties, as it wants to avoid overheating the market again.  

The cooling measures “have helped to achieve a soft landing in the property market,” Mr Wong said.

Asked whether there would be any moves on property curbs this year, he said: “You have to wait and see.”

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, South-east Asia’s biggest developer said in an interview earlier this month.  

Singapore, which outlined its annual budget on Monday (Feb 20), is studying measures to boost revenue, including higher taxes, to help ease pressure on the budget as spending increases, Mr Wong said in the interview. 

Mr 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.

Correction note: Bloomberg updated the story on Feb 22, which was first published on Feb 21, to say factors supporting property demand, rather than property curbs, are set to remain.