MAS calls for caution amidst “euphoria” in Singapore property market

Romesh Navaratnarajah5 Jul 2018

Public Housing in Singapore

Property prices in Singapore have surged by 9.1% since mid-2017.

The “euphoria” in the Singapore property market should be met with caution, according to Monetary Authority of Singapore (MAS) managing director Ravi Menon.

Speaking at an annual report media briefing on Wednesday (4 July), he noted that the property market has witnessed a resurgence in prices and transactions over the past year.

More: Singapore Private Home Prices May Surge 20% This Year: Savills

Private housing prices rose by 9.1 percent since the trough in the second quarter of 2017, which mostly offset the cumulative price decline of 11.6 percent seen during the four-year period between mid-2013 and mid-2017.

Over the last 12 months, the number of property transactions also soared by about 25 percent from the previous 12 months, while new housing loans jumped 34 percent year-on-year.

“The recovery in the property market is welcome, but it should not decouple from economic fundamentals,” Menon said.

He noted that a rapid hike in prices raises the risk of a destabilising market correction later when additional supply comes onstream.

With this, he called on developers to be cautious in making land bids, while individuals were reminded to be cautious of debt servicing burdens and to avoid taking on too much leverage when purchasing a home, reported the Business Times.

Banks, on the other hand, should be careful when underwriting and perform stress-tests for future scenarios.

“Basically, we’re sounding caution to everyone to be sober, balanced and exercise good judgement,” Menon said.

He added that the central bank, the Ministry of National Development and the Ministry of Finance “are closely monitoring developments in the residential property market, and remain committed to ensuring a sustainable market”.

ERA Realty’s key executive officer Eugene Lim believes the warning serves as a reminder that the government will intervene once it feels the property market is overheating.

“The government’s key concern is the scale and pace of property price increase vis a vis economic and income growth. We are reminded that the government stands ready to make policy and regulatory changes in order to ensure a sustainable property market over the longer term,” he said.

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

Jul 05, 2018
I wish they would just calm down. The MAS created the decline when every other property market in the world went up. In fact it can be argued that the distortion in the market was effectively caused by the MAS intervention.

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