ST : Govt keeping a close eye on property market

Nov 3, 2010

Govt keeping a close eye on property market

PRIME Minister Lee Hsien Loong said yesterday that the Government is keeping a close eye on the property market to avert the formation of an asset bubble.

Recent measures to cool the market have dampened sentiment, but liquidity is awash in the region, he told news agency Reuters in an interview on the risks facing Singapore.

Mr Lee also vowed to continue to take action if necessary, Reuters reported.

'Our property market has been taking off, which is causing some consternation,' he said.

'We have had a series of measures to squelch the property market, but liquidity is awash, sloshing around the whole region.

'We are watching carefully. The last set of measures were announced at the end of August, they seem to have dampened sentiment some, but we will have to watch and see.'

The latest Government measures to stem overheating include reducing the maximum loan for buying a second residential property, imposing stamp duty on owners who sell properties within three years of buying them and tighter restrictions on those buying HDB resale flats.

As for Singapore's future, Mr Lee said it could define itself as one of the world's most attractive global financial centres with a less reactive approach to currently emotional issues like regulation.

He noted the swift legislative responses to the financial crisis in countries such as the United States and Britain, saying: 'We want to maintain a system where there are adequate safeguards, but at the same time, the basic principle is free market and caveat emptor (buyer beware).'

He added: 'We are trying to be stable.

'I don't say that we are consciously less volatile than others, but I think it is good for us if we can maintain a stable long-term perspective and rise above the immediate pressures of the crisis at the moment.'

Mr Lee also touched on relations between the United States and China.

He said Singapore needed both countries to work out their differences to ensure prosperity.

'If that turns sour, a lot of things can go wrong,' he said, noting that the mood towards China was quite sour on the ground in the US.

'And not just among the unions and the Democratic (Party) left wing, but even the corporates, the businessmen.'

Mr Lee said he was worried that short-term thinking could lead to bad decisions.

'Nobody is speaking up to say 'please manage this with a long-term perspective',' he said.

But he was optimistic about the eventual health and development of both major powers' economies, even though both needed many years of transformation.

Beijing, he noted, required fundamental structural change to drive more domestic demand and investment.

'It is not going to happen overnight, but over 10 years, I see change,' he said.

The US needed to transcend the difficulties of domestic partisan politics to take tough decisions on fiscal policy.

'If you look at it on a five-year timeframe, you can't help being worried, but if you look at it in a 20-year timeframe, you say of all the economies in the world, the Americans are the ones most capable of re-inventing themselves,' Mr Lee said.


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WATCH AND SEE

'Our property market has been taking off, which is causing some consternation. We have had a series of measures to squelch the property market, but liquidity is awash, sloshing around the whole region...We are watching carefully. The last set of measures were announced at the end of August, they seem to have dampened sentiment some, but we will have to watch and see.'

Prime Minister Lee Hsien Loong