Property cooling measures are set to stay put, at least for now, National Development Minister Lawrence Wong said yesterday.
"The price adjustments that we've seen so far have been moderate compared to the increase in prices that took place very quickly in the past few years," he said on a visit to the Housing Board's Waterway Terraces I project in Punggol.
"It's still not time yet to unwind the cooling measures. We don't want to risk a premature market rebound."
But Mr Wong added that the situation is "fluid" and "very dynamic".
"Economic conditions both externally and within Singapore are changing, so we are monitoring the situation very closely and we will adjust as necessary if and when conditions change."
HDB resale prices rocketed up by almost 50 per cent between 2009 and 2013.
Since their peak in the second quarter of 2013, prices have fallen about 10 per cent.
Private home prices are also down 8 per cent from their last peak in the third quarter of 2013.
These price drops have been in part due to several measures introduced to tame the hot market.
These include a mortgage servicing ratio limit of 30 per cent, introduced in 2013, capping the proportion of gross income that can be used to service a loan for an HDB flat.
Another measure, the total debt servicing ratio of 60 per cent, was also introduced in 2013. This prevents financial institutions from granting a home loan if the total monthly repayments of prospective borrowers exceed 60 per cent of their gross monthly income.
PropNex chief executive Mohamed Ismail Gafoor said that a total removal of these cooling measures could backfire with yet another price surge. "All the effort in the last three years would go down the drain if they reverse the measures too quickly," he said.
But he added that the market might benefit if some, such as the Additional Buyer's Stamp Duty (ABSD), are relaxed in stages.
Foreigners currently have to pay an additional 15 per cent of the property price when they purchase a home here. Singaporeans buying their second and third home have to pay 7 per cent and 10 per cent respectively.
Mr Ismail said this discourages property investment and badly affects the market in the core central region, where many foreigners live.
According to the Inland Revenue Authority of Singapore, the number of ABSD transactions by foreigners was 1,149 last year, down from 1,980 in 2013 and 2,432 in 2012.
Mr Wong did not rule out the possibility of lifting certain measures ahead of others, but stopped short of committing to which might be the first to go.
"We don't have to adjust by unwinding everything... but it's premature to say what exactly we will unwind, what will happen."