Singapore, Growing Too Fast?
The government of Singapore is facing the kind of problems most other cities’ municipal officials can’t imagine in their wildest fantasies. The stratospheric rebound of the tiny island-city-nation’s real estate prices has prompted government to issue a warning about the possible formation of a market bubble.
Residential property prices in Singapore surged 15.75% in the third quarter of 2009. Rebounding form a six-year low of 953 housing units sold in the fourth quarter of last year.
Back in September 2009, the government imposed policies aimed to curtail the rapid increase in the housing market prices, including adding stringent measures to prevent homeowners form delaying mortgage payments.
“We do want to manage the property cycle as best we can, prevent boom and bust,” said Finance Minister Tharman Shanmugaratnam, while admitting that it is difficult to predict the property needs of the city-state in advance.
The government is exploring the use of other policies to manage the house price cycle, such as adjusting land supply, modifying rules on credit, and in severe cases, amending the country’s tax policies, he added.
The Monetary Authority of Singapore (MAS) noted in its latest Financial Stability Review, released November 2009: “As Singapore emerges from recession and with the market expecting low interest rates to persist for some time, the risk of a renewed escalation of speculative momentum cannot be discounted.”
Finance Minister Tharman Shanmugaratnam, state that the government’s aim is to“ manage the property cycle as best we can, [to]prevent boom and bust,”
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