Singapore

Rising prices prompt talk of more property cooling measures

Private home prices rose 2.1 per cent in fourth quarter, defying pandemic-induced recession

Talk of another round of property cooling measures has intensified in the wake of recent ministerial remarks that the Government is keeping a close watch on the market, which has so far defied the pandemic-induced recession.

This comes as URA flash estimates showed private home prices rose 2.1 per cent for the fourth quarter - the steepest quarterly increase since the second quarter in 2018 when they jumped 3.4 per cent before property cooling measures hit in July that year.

This is despite Singapore's economy appearing on track to shrink 6 per cent for last year and unemployment hitting 3.6 per cent in Q3 compared with 2.3 per cent a year ago.

Strong sales at Normanton Park, the largest and first new launch this year with close to one-third of its 1,862 units sold, was cited as another factor.

But some analysts believe it is premature for more cooling measures to be implemented at this point.

Precipitating the July 2018 round of cooling measures were four consecutive quarters of price increases totalling 9.1 per cent, as well as higher than expected Government Land Sales (GLS) bids and record-high collective sale bids.

In comparison, private home prices are up 2.2 per cent for last year.

"GLS land bids were in line or lower than expected, although the number of bids is increasing. And collective sales are still nascent, with just four smallish ones in 2020," noted Ms Tricia Song, Colliers International's research head for Singapore.

"We believe the Government will wait out a few quarters and monitor prices.

"In the meantime, it is sending out messages that buyers should be prudent and that prices should not continue to move up significantly before an actual economic pickup," said Ms Song.

Deputy Prime Minister and Finance Minister Heng Swee Keat said on Monday the Government is paying close attention to the local real estate market to ensure it remains stable.

As the economic outlook remains very uncertain, he added that "we do not want to see the property market run ahead of the underlying economic fundamentals".

Mr Heng's comments at the Real Estate Developers' Association of Singapore (Redas) came hours after National Development Minister Desmond Lee said at a BCA-Redas seminar that the Government is monitoring the property market "very closely".

Mr Lee had urged developers to remain prudent in their land bidding, and households to exercise caution when purchasing property, given the uncertain economic outlook.

Property