Forum: Consider price moderation mechanisms between rounds of property cooling measures

The latest round of cooling measures, which includes tools such as the additional buyer's stamp duty rates, total debt serving ratio and loan-to-value limit, is an effective way to counter the buoyancy of the private residential market.

However, after a period of time, the impact of cooling measures seems to taper off, and a new round is needed.

By then, property prices might have moved up.

Perhaps other price moderation mechanisms can be considered in between cooling measures.

Singapore's residential property markets are orderly and well-regulated.

Close to 80 per cent of the resident population own public housing. The private residential market is relatively small. Land primarily comes from State sales, with small amounts from the private sector.

Given this backdrop, perhaps there is merit in exploring the feasibility of setting out guidance on the pricing of completed units, taking the cue from economic fundamentals, in state land sale tenders.

In this way, the price guidance could also moderate market expectation.

This approach might not be welcomed by the market as it is at odds with owners' expectations of a rising market. However, reality has shown that when property prices run ahead of economic fundamentals, a new round of cooling measures could follow suit.

From a long-term perspective, an orderly property market, with moderate price appreciation not exceeding economic fundamentals, is the way to go for the Singapore private residential market.

Ong Kim Bock

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