Singapore Central Bank Is ‘Highly Vigilant’ on Home Prices

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Singapore officials remain “highly vigilant” over rising home prices, the central bank chief said, while dismissing the notion that the market is overheated following its rebound during the pandemic.

Authorities “remain highly vigilant to the sustained increase in prices relative to income trends,” Ravi Menon, managing director of the Monetary Authority of Singapore, told reporters Wednesday. “A prolonged divergence between prices and incomes is unsustainable from a market stability perspective and undesirable from a housing affordability perspective.”

Singapore’s property market “has been remarkably resilient” in the face of the coronavirus and last year’s recession, Menon said at the release of the bank’s 2020/2021 annual report. The private property index was 5.6% above its pre-pandemic levels in the first quarter while nominal gross domestic product was about 4% below, he said.

The sharp recovery in Singapore’s residential property market has sparked speculation that the government may impose cooling measures for the first time since 2018. Menon’s comments add to concerns after officials previously said they didn’t want the market to run ahead of economic fundamentals.

Still, Menon added that he didn’t think the property market was too hot, “because if it’s overheated, we’re not doing our job well.”

Home prices in the city-state climbed 3.3% in the first quarter, the most since the second three months of 2018, just before authorities imposed the most recent round of tightening measures.

Asked whether property curbs may be imposed this year, Menon said authorities will never share that information in advance because it would defeat the purpose of implementing them.

“So, stay tuned and just watch,” he said. “We hope the market will continue to remain stable and that we don’t have to make any moves.”

He said the central bank is “determined to make sure that the market remains stable and prevent overheating from happening.”

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