(Bloomberg) — Singapore’s residential property curbs are expected to stay for some time as the city-state’s economy remains stable and demand is still “very resilient,” National Development Minister Lawrence Wong said.
Singapore home prices fell 3 percent in 2016, with prices declining for the 13th straight quarter in the last three months of the year for the longest streak since data was first published in 1975. Still, Singapore house sales last year topped 2015’s tally as a third straight year of price declines stoked pent-up demand from homebuyers.
The cooling measures “have helped to achieve a soft landing in the property market,” Wong, who’s also the second finance minister, said in a Bloomberg Television interview with Haslinda Amin. “If you look at the market today, demand remains very resilient.”
Singapore’s government has been steadfast in its commitment to cool the housing market, maintaining real estate curbs rolled out since 2009, with some of the strictest measures implemented in 2013. The government has repeatedly signaled it is reluctant to ease property curbs, including capping debt repayments at 60 percent of a borrower’s income and higher stamp duties, as it wants to avoid overheating the market again.
Singapore’s residential property curbs are set to stay in place for at least another year amid signs the city’s housing market is stabilizing, the chief executive officer of CapitaLand Ltd., Southeast Asia’s biggest developer said in an interview earlier this month.
For a story on charts weighing on Singapore property prices
“We see volume picking up and the price declines have slowed,” Lim Ming Yan, the president and CEO of CapitaLand, said on Feb. 15. “We see this trend continuing for 2017. There is no compelling reason for the government at this point to make major changes” to property curbs, he said.
CapitaLand has pared its exposure to Singapore residential developments. Its inventory units were valued at S$1.7 billion ($1.2 billion) at the end of 2016, or 4 percent of estimated total assets, according to a Bloomberg Intelligence report led by senior industry analyst Patrick Wong.
CapitaLand rose 0.9 percent to S$3.53 at 10:32 a.m. in Singapore trading. City Developments Ltd., the country’s second-largest developer, slid 0.9 percent to S$9.14 and Wing Tai Holdings Ltd. declined 0.3 percent.
Singapore, which outlined its annual budget Monday, is studying measures to boost revenue, including higher taxes, to help ease pressure on the budget as spending increases, Wong said in the interview. Wong also said that he doesn’t anticipate a China-U.S. trade war, but the risk of one is “real” and Singapore should be prepared for the eventuality and its aftermath.
“The impact would be very significant, not just for us but for countries around Asia,” he said. Trade accounts for more than three times Singapore’s gross domestic product.
–With assistance from Melissa Cheok and David Roman
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