SINGAPORE – Amid the current volatility in the global financial market, National Development Minister Desmond Lee said care must be taken to not overcorrect Singapore’s property market.

The property market here has been fairly resilient, in part because of the cooling measures and macroprudential measures introduced over the years to prevent bubbles from forming, he told The Sunday Times.

Macroprudential measures currently in place include the total debt servicing ratio, which caps the maximum property loan amount buyers can get based on their monthly income to prevent overleveraging.

While Singapore’s market is on the uptick, some major markets around the world such as the United States, Australia, New Zealand, China and other places are sliding, he added.

“We are very mindful of economic conditions. And as we said before, we want to ensure a stable property market and are putting in (place) measures to cool the demand,” said Mr Lee.

Since the beginning of March, the collapse of California-headquartered Silicon Valley Bank, the woes plaguing Swiss bank Credit Suisse and the resulting fallouts have sparked concerns in many countries about the stability of the global financial system.

At the same time, the current geopolitical climate is “not benign”, with the conflict in Russia and Ukraine continuing to persist, and ongoing tensions between major superpowers China and the United States, both of which are major trading partners for Singapore.

“All in, 2023 holds a lot of uncertainty and we are starting to see some caution in the property market as well,” Mr Lee said.

The two rounds of cooling measures – introduced in December 2021 and September 2022 – to moderate demand and ensure prudent borrowing are still making their way through the market, he added.

The latest round includes a 15-month wait-out period for private property downgraders before they can buy a Housing Board resale flat. The maximum amount that home buyers can take for HDB loans was also tightened.

In addition, there will be a significant ramp-up in housing supply in the coming years, both on the public and private property fronts. This will help ease some of the pressure on the market, said Mr Lee.

The HDB is committed to launching up to 100,000 new flats from 2021 to 2025 to meet housing demand.

Land parcels that can yield about 4,100 private residential homes will be made available under the Government Land Sales programme in the first half of 2023 – an increase of 17 per cent from the second half of 2022.

So while his ministry keeps an eye on the buoyant property market and its movements, it is also mindful to not overcorrect it, said Mr Lee. 

“It is one thing to deal with the buoyant property market in an economy that’s booming. But it’s quite another to tackle the buoyant property market at a time when the outlook actually is far from benign and actually quite worrying,” he added.

“So we want to make sure we calibrate very carefully and keep a very close eye on the property market at this time.”