SINGAPORE - The property industry, homeowners and the Government have a shared interest in ensuring a stable and sustainable property market, said Finance Minister Heng Swee Keat at the 56th anniversary dinner Thursday evening of the Real Estate Developers' Association of Singapore (Redas).
He said that US subprime debacle and the Global Financial Crisis in 2007-08 are reminders of the perils of credit and property bubbles and the risks of asset markets becoming decoupled from the economy's underlying fundamentals. The consequences have been severe in the US, Mr Heng added.
The minister was speaking about how Singapore aims to have sustainable development of the real estate industry in an economic sense.
That is why while there have been swings in the property market, but by and large, these have not led to volatility in the broader economy.
He said that the government "has always taken a medium-term approach towards managing land supply, based on fundamental demographic and economic factors, and has encouraged a competitive and transparent environment to ensure a well-functioning property market."
Mr Heng's remarks came after Redas president Augustine Tan had highlighted concerns by the developers over the widening supply-demand imbalance. He said that some projects had seen price cuts of up to 11 per cent.
Apart from price pressures, some 3,000 units from projects from the Government Land Sales Programme 2012 remain unsold.
Mr Tan also raised concerns over the rising costs of development. Construction costs have increased as a result of improved quality and higher specifications for finishes and fitting.
He said that prices cannot fall too deeply without affecting the quality of the product and operational obligations.