'Govt will relook property curbs when risks go down'

The Government will relook current property cooling measures when the risks are "less or manageable", Home Affairs and Law Minister K. Shanmugam said yesterday.

He said the moves were taken to prevent the property market from overheating and crashing, and avoid "systemic risk" in the banking system - the chance that one bank failure might cause chain reactions.

When the Finance and National Development ministers judge that such risks are "less or manageable", they will then relook cooling measures such as the Additional Buyer's Stamp Duty (ABSD), he added.

At a 30-minute dialogue with property agents during a conference held by ERA Realty, Mr Shanmugam was asked when the Government would lift the ABSD. To that, he would only say: "We have a rough idea of when to change, but that doesn't mean that we announce it."

The ABSD and other cooling measures, such as the Total Debt Servicing Ratio -which caps the proportion of salary that goes towards servicing debts - aim to protect Singaporeans from a market crash, and from taking on loans they might not be able to service, he said.

Mr Shanmugam's comments maintain the Government's stance that it is not yet time to relax cooling measures, said ERA Realty key executive officer Eugene Lim.

National Development Minister Lawrence Wong said the same at the end of last year.

The Government's aim seems to be stability rather than any specific target figure for price declines, said Mr Lim. "The indication they are looking for is: If I pull back the measures, will it cause the price to rebound quickly?"

At yesterday's dialogue, Mr Shanmugam was also asked what landlords could do, given a shortage of tenants - in part because a tighter foreign manpower policy means fewer foreigners looking to rent.

The Government has warned about this danger for years, the minister said. "The developers knew it, the purchasers knew it. Where did they assume the tenants were going to come from?" Beyond broad steps such as cooling measures, "individual choices are very difficult for the Government to control", he added.

A version of this article appeared in the print edition of The Straits Times on February 04, 2016, with the headline ''Govt will relook property curbs when risks go down''. Print Edition | Subscribe