Discussions about a possible new round of property cooling system have risen when National Development Minister Desmond Lee and Deputy Prime Minister and Minister of Finance Heng Swee Keat sounded out warnings about the property market last January 18, 2020.
National Development Minister Desmond Lee stated during the Building And Construction Authority-Real Estate Developers’ Association of Singapore (REDAS) Built Environment and Prosperity Seminar 2021, that the government is “very closely” watching the property market after several price increases and robust new condo sales.
He warned the developers stating that they should continue to remain prudent in land bidding and work responsibly with agents, taking into account the needs and affordability on the side of the buyer. Please see Midwood location as it is located near to Downtown Line which is connected to the city.
On the other hand, he also warned the home buyers to be mindful of their ability to service long-term mortgage obligations before making long-term financial commitments.
He also added that the government will adjust policies if necessary to maintain a stable and sustainable property market in Singapore. Please see Midwood for more details on the development.
In just a few hours, Deputy Prime Minister and Minister of Finance Heng Swee Keat stated at a REDAS 61st Anniversary Celebration Dinner Speech that the government is paying close attention to the local estate market to ensure its stability for the young Singaporeans to acquire their dream property. Thus intensifies the talks of possible new property cooling measures.
Looking back in 2017 when the government issued the same warnings about the property market and in 2018 where shortly after the warning, the government announced the major round of additional measures including the raise of Additional Buyer’s Stamp Duty (ABSD) and tiger loan curbs.
This kind of track record creates a strong impression that the government’s public statements were a reliable sign of possible additional cooling measures. Thus giving a strong certainty to the Singaporeans to have a buy-now or pay-later mindset with regards to the property market.
Going back to the basics of economics, it is vital to remember that what drives the price of a certain product upwards is not its current worth but the anticipation of what its future price would be.
Though there is no clear statement about having additional cooling measures in the property market, one thing is most likely sure though, that there will be an inclined of buyers willing to pay the current price because of having the fear that they will pay more once the talk about additional cooling measures becomes a reality. This causes the price of the property to extremely go up thus giving the government a chance to make additional property cooling measures to be implemented.
So we can say therefore, in our opinion, that the government must be cautious about what they convey to the public to avoid certain issues and misconceptions to occur. Because if they don’t, then the burden of an inflating property market will be on their shoulders this time. Besides, policies can always be made behind closed doors without fueling fear of being missed out anyway.