THE TEMASEK TIMES

News and views from an unique perspective

MAS sounds alarm bells at possible housing bubble in Singapore

Posted by temasektimes on October 10, 2012

Singapore’s property has risen to beyond sustainable levels which may lead to a bubble burst in the event of a crash, warns the Monetary Authority of Singapore (MAS).

The warning came after MAS announced a new round of measures meant to subdue rising housing prices, including capping loan tenure at 35 years.

MAS said that recent government measures such as the Additional Buyer’s Stamp Duty “have had a moderating effect on residential property prices” and that “there is also significant supply of housing that will come onto the market over the next two years” the demand for housing is simply not slowing down.

“Prices in both the HDB resale market and private residential property have continued to rise in Q2 and Q3 of 2012,” MAS noted.

It added that the prevailing and problematic low interest rates are “likely to persist for some time.”

“It will continue to spur demand in the residential property market, pushing up prices beyond sustainable levels which could lead to a bubble burst that will pummel Singapore borrowers and the economy.”

18 Responses to “MAS sounds alarm bells at possible housing bubble in Singapore”

  1. Lim said

    Such fearful timid steps to cool market. So frighten to prick the bubble in case an unexpected plunge in housing prices drag their beloved Temasek bank down. Hence this kind of piecemeal ineffective frustrating steps which solve nothing. Useless measures..

  2. GodBlessSG said

    Still “possible bubble”?
    Hahaha…. get back to earth, please! It’s already in a bubble.
    Too late too little too useless.

  3. Singkaypoh said

    KBW says “the view is worth the price” lol

  4. dog of the dogs said

    Another big wayang only, they want to bring in more people but don’t know this problem ? They are joking la.

  5. Lim said

    I think it is not the borrowers that they are worried about. PM Lee says banks will have to be bailed out if they fail, e.g. giving risky loans and playing with derivatives . So it is obvious who they are protecting. Rising property prices benefit the banks, govt coffers, developers, etc except the poor borrower who will be burdened with paying loans till they die. So of course they won’t kill the golden goose that lays $$$ but when the goose is at risk of bursting – they will starve the goose a bit so as not to let it die and bringing down with it all the banks, stock market and rents.

  6. jacquelee said

    Properties prices are not a reflection of the real economy which is the production of goods and services. To be competitive, the prices probably have to drop by 70%. Singapore should not follow Hong Kong to let the speculators be it developers or buyers ran wild and has difficulty to cure now. We should follow Israel who are very quick to whack the developers if they tried to divert the market for their own end. Developers are not treated as heroes but lazy blood suckers who are not real entrepreneurs that can hinder the economy Because of the proactive government and central bank there, start ups can thrive and be world leaders. With Singapore emphasis on properties ownership which lead to outrageous prices where the real economy is not a leader in anything we will be condemned forever. Even Taiwan has more entrepreneurs in tech sector as they are heroes and not developers. China is doing the right thing by trying to deemphasize properties and very unfortunately Singaporean business are only good in developing properties there unlike the Taiwanese who are strong in manufacturing.

  7. Derrick said

    If there is indeed a property bubble in singapore then the PAP is to blame. The bubbles was the result of its wrong policies and decisions. Another mistake to add to PAP long list of mistakes and failures.
    (1) low productivity of Singapore economy
    (2) low birth rate which started from LKY’s “Stop at 2” policy
    (3) depressed local wages
    (4) failing to plan for the many foreigners it allowed into Singapore
    (5) shortage, “shrinking” and high cost of public housing
    (6) shortage of public buses and MRT trains
    (7) shortage of hospitals, doctors and nursing homes
    (8) shortage of teachers and places in schools for Singaporeans
    (9) gave foreigners a big advantage over Singaporeans in job market
    (10) shortage of jobs for Singaporeans
    (11) foreigners taking jobs away from Singaporeans
    (12) frequent breakdowns of MRT trains
    (13) overcrowded public transport (buses and MRT trains)
    (14) bailout of public transport (failed privatisation)
    (15) frequent 50-year “ponding”
    (16) high inflation (Singapore more expensive than Hong Kong)
    (17) high cost of education and healthcare
    (18) high cost of electricity (failed privatisation)
    (19) poor air quality as per WHO Air Quality Guidelines
    (20) depleted CPF accounts after buying “affordable” HDB flats
    (21) many CPF accounts below CPF Minimum Sum
    (22) massive (billions) losses of taxpayers’ money by Temasek / GIC
    (23) wasteful purchases by Government agencies like NParks
    (24) made Singapore a “tuition nation”
    (25) real income likely to fall this year
    (26) failing to provide Singaporeans with Swiss Standard of Living

  8. lky said

    Compared to the same period in the previous year, the HDB resale price index has risen +5.7% in Q32012, +11.6% in Q32011, +15.6% in Q32010, +5.6% in Q32009 and +19.5% in Q32008. Thats a Total of 71.9% since Q32007, despite the severe downturn.

    To most households earning median or average income, a housing bubble has already formed couple of years ago. With the new infinite timeframe QE3, it’s juz gonna get worse.

    So I’m sorry to say this to MAS, we dun need your warning bells, I think it’s you who needs morning call.

  9. Faiza said

    Well said lim I could agree more

  10. spotlessleopard said

    In America a 5% triggered a meltdown…In Singaproe at 8% there is still no meltdown…and when it finally cannot be propped up anymore..singapore will sink. …the GLC. and TLCs.control 65 to 70% of the economy..they will be the first ones to feel; the heat.

  11. Ahflirt23 said

    stupid cooling measures that only affect Singaporeans. The root of the problem is not Singaporeans getting so rich so fast that they speculate in property markets. The root of the problem is rich foreigners buying into Singapore property because compared to Hong Kong, Singapore’s property are still cheap. Singapore and Hong Kong is similar, both are land scarce. So if the stupid government don’t stop caring about money and start caring about local Singaporeans, we can expect our property prices and property sizes to reach HK levels.

  12. Sad Sad said

    They should price HDB BTO at 200k for four room to push down the housing price within the district..

    • Robin hood said

      Many think this is the current cost, incl land cost to build a 4 & 5 rm HDB flat. The bulk of the remainder buyers cough out looks like plain daylight robbery.

  13. NBCCD said

    Long dockey year bubble aready here ! what talking You MAS ??

  14. Pete said

    人是他,鬼也是他。全部都是他们说的话。

  15. Jeff D said

    I must say, that’s a wonderfully informative slide at the top. I remember when Singapore had four official languages, one of which was the only one not tied to a single ethnic group here, so it was used when something needed to be read and understood by ALL Singaporeans. Simplified Chinese was not that language.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

 
%d bloggers like this: