Property market stable but faces risks: Desmond Lee

Global uncertainties could draw capital inflows into sector here

Second Minister for National Development Desmond Lee said that private housing prices appear to be moving more in line with economic fundamentals than they were in the first half of last year. PHOTO: REDAS

The property market is now broadly stable, but risks from trade rows and geopolitical tensions could still hit the sector, Second Minister for National Development Desmond Lee said yesterday.

He told the 60th anniversary dinner of the Real Estate Developers' Association of Singapore (Redas) that private housing prices appear to be moving more in line with economic fundamentals than they were in the first half of last year.

Land bids have also been more cautious, he added, noting that the Government will need to continue to take an active role in order to keep the market stable.

Mr Lee, who is also the Minister for Social and Family Development, noted: "These are signs that the market is not overly exuberant, but growing at a more sustainable pace.

"But we should also be clear-eyed on the global outlook, which remains uncertain."

Uncertainties in the market include the United States-China trade conflict, Brexit, tensions between Japan and South Korea and the situation in Hong Kong.

Mr Lee, who was speaking to about 680 people at The Ritz-Carlton, Millenia Singapore, noted that there are concerns that these uncertainties could attract capital inflows into the local property market, given Singapore's status as a safe haven.

"At this point, the share of transactions by foreigners remains stable and low, accounting for 5 to 6 per cent of total transactions over the past three quarters," he added.

It is important that the property market remains stable and sustainable, given that it has a direct impact on the lives and aspirations of Singaporeans.

Continued government intervention, such as the cooling measures in July last year, is needed to maintain this stability, he added.

Mr Lee said: "We cannot take a hands-off approach to the property market, because our experience here and abroad has shown that left to itself, (the market) tends to go through large price swings, which harms genuine home buyers and home owners."

Developers should pace out launches steadily to match demand from buyers amid an expected increase in supply of private housing units, he added.

Redas president Chia Ngiang Hong said developers are concerned over the challenging market situation of high supply and subdued demand.

He added that they need to be more proactive in facilitating dialogue with the Government and "together help shape policies which are pro-enterprise and pro-business".

To do this, Redas will form a committee to raise concerns with government agencies.

Mr Chia also announced yesterday that Redas had raised $600,000 for KidStart, a programme that offers parenting help for low-income families with children up to age six.

Mr Lee praised the move, noting that the strengthening of social safety nets is needed with social challenges expected to get harder.

Meanwhile, he also called on developers to look to the future, with much work still to be done.

Upcoming projects include the Jurong Innovation District, Greater Southern Waterfront and the relocation of Paya Lebar Air Base.

Developers must also play their part in addressing the threat posed by climate change, said Mr Lee. This should be done through making green buildings a priority and coming up with engineering solutions to address the impact of climate change.

The Government will look to actively support developers who want to innovate, he added.

Correction note: This article has been edited for clarity.

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A version of this article appeared in the print edition of The Straits Times on December 03, 2019, with the headline Property market stable but faces risks: Desmond Lee. Subscribe