The Monetary Authority of Singapore (MAS) said it would remain vigilant to rising home prices even though the property market was not "overheated".

"No, we do not think the market is overheated right now, because if it is overheated, then we have not done our job well," MAS managing director Ravi Menon said in response to a question at a press conference on the MAS Annual Report yesterday.

Mr Menon said the property market had been remarkably resilient in the face of the pandemic and recession last year as well as continued uncertainty over Covid-19 risks this year.

While gross domestic product contracted last year, the residential property price index (PPI) rose by 1.6 per cent. As at the first quarter of this year, the PPI was 5.6 per cent above its pre-pandemic levels, said Mr Menon.

The sharp recovery in Singapore's residential property market has sparked speculation that the Government may impose cooling measures for the first time since 2018.

"The approach of the Government is to prevent the market from overheating. We're watching it very closely," said Mr Menon.

"The authorities will never tell in advance whether they are going to implement measures, because that defeats the purpose of implementing the measures. So stay tuned and just watch, and we hope the market will continue to remain stable."

The MAS, together with the Ministry of National Development and the Urban Redevelopment Authority, remains highly vigilant to the risk of a sustained increase in prices relative to income trends.

Mr Menon said that "a prolonged divergence between prices and incomes is unsustainable from a market stability perspective and undesirable from a housing affordability perspective".

He added that the MAS had repeatedly said it was determined to make sure the market remains stable and to prevent overheating from happening.