Singapore - Two Members of Parliament again warned of the need to rein back on cooling measures to prevent further decline in home prices. And unfazed, Minister for National Development Lawrence Wong echoed the same reply.
Alex Yam (Marsiling-Yew Tee) and Chong Kee Hiong (Bishan-Toa Payoh) made these points in the Committee of Supply debate on Monday, following in the footsteps of Christopher De Souza (Holland-Bukit Timah) who had reiterated his call for the removal of the additional buyer's stamp duty (ABSD) for Singaporeans last week.
But the minister maintained that the measures have been effective in stabilising the property market, and it remains "too early to declare victory and unwind the measures".
Mr Chong is also CEO of OUE Hospitality Trust. He declared his interest in the real estate industry before speaking.
He said: "We must ensure that the housing market is stabilised. When the market was rising, cooling measures were necessary in preventing a housing bubble. Now, with a more subdued market, we have to respond quickly to prevent the market from further decline. Otherwise, there will be negative impacts on real estate related industries."
These include construction, interior design, renovation contractors, furniture, and consumer electrical and electronics. This could, in turn, affect jobs, he said.
Mr Yam added that the housing price bubble has cooled down significantly, and besides there are loan curbs (the 60 per cent total debt servicing ratio) to calibrate the market. Like Mr De Souza, he felt that the ABSD could be done away with.
But Mr Wong replied that the underlying demand for property is still strong, and relaxing the measures too early may risk a premature market rebound.
"Nonetheless, we recognise that the housing market is affected by the broader economy and global events. We will keep a close watch, and will be prepared to respond where needed," he said.
Earlier in his speech, Mr Wong also pointed out that resale HDB flat prices have moderated and are more affordable now.
Plotting HDB resale prices against household income, he said: "At one time, prices were rising faster than income. But this is no longer the case. Between the last property market trough in 2009 and 2015, HDB resale prices increased by 35 per cent; but median household income increased by 44 per cent."
He added that the softening of the property market is good for prospective buyers, as there are now many more attractive resale options to consider.
This article was first published on April 12, 2016.
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