Not time yet to lift property cooling measures: MAS

Romesh NavaratnarajahJuly 26, 2016

Residential District in Singapore

Singapore’s property cooling measures won’t be removed anytime soon.

It is not the right time to ease the property cooling measures, revealed the Monetary Authority of Singapore (MAS).

“There is still some way to go, to entrench the gains in stabilising the property market and restoring household debt sustainability,” said MAS Managing Director Ravi Menon at the central bank’s annual report briefing on Monday (25 July).

Notably, household balance sheets have started to strengthen, with annual growth in household debt moderating to 1.7 percent in Q1 2016, down from around 8.0 percent in the past five years.

Over the last two years, the property market has also been stabilising, with prices moderating from their peak in Q3 2013.

However, Menon noted that prices have adjusted only moderately by a cumulative 9.4 percent, compared to the 60 percent increase recorded between 2009 and 2013 when nominal incomes rose by only 30 percent during the same period.

“The risk of a renewed surge in property prices is not trivial given that interest rates are likely to remain low and global investors continue to search for yield,” he said.

“And while the growth in household debt has eased considerably, it will take time for household balance sheets to strengthen and become more resilient to interest rate and income shocks.”

Cushman & Wakefield Research Director Christine Li noted that while the multiple dosages of property cooling measures such as the Additional Buyer’s Stamp Duty (ABSD) and Total Debt Servicing Ratio (TDSR) have significantly curbed demand for housing, “liquidity in the market is still excessive, which prompts investors to buy physical assets to combat inflation or for wealth preservation in a persistent low interest rate environment.

“Along with the pent-up demand accumulated over the past three years and the decline in the mortgage rates post-Brexit, the risk of having a technical rebound of the property prices is now higher compared to quarters ago,” she added.


Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories, email

Jul 26, 2016
Menon conveniently uses the data from 2009 to 2013 to justify that property price rise of 60% and decline only 9% after the cooling measures. He further declares that income has appreciated only 30%. He selectively chooses the year-range to suit his position. Why not choose 2000 to 2013 and compare the property price appreciation against income?

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