Factors affecting property demand to remain for some time

In a Bloomberg interview, National Development Minister Lawrence Wong revealed that, "demand is still healthy," due to low interest rate and economic stability.

 

UPDATED: The government’s decision to keep its residential property curbs came as no surprise to industry experts, reported The Straits Times.

In a Bloomberg interview, National Development Minister Lawrence Wong revealed that, “demand is still healthy,” due to low interest rate and economic stability. He went on to say that these factors, “will remain for some time.”

CapitaLand President and Chief Executive Lim Ming Yan even expects the curbs to remain in place for another year. “We see this trend continuing for 2017,” he said in a Bloomberg interview earlier in the month.

Ku Swee Yong, Key Executive Officer at International Property Advisor, noted that the government is “probably reluctant to pull back on the curbs because there remain the risks that doing so will overheat the market again”.

Tay Hong Beng, Head of Real Estate at KPMG in Singapore, added that the authorities may be concerned that “the existing economic conditions with generally lower interest rates and relative affordability of the residential properties may create an unmanageable spike in demand from both foreign and local investors”.

Meanwhile, Ong Teck Hui, National Director for Research and Consultancy at JLL, believes it is still too early for the government to ease the curbs.

With this year’s Budget including larger Central Provident Fund housing grants for resale flats, Ong expects HDB resale prices to “stabilise or perhaps rise slightly with increased demand and higher resale volume”.

And a healthy resale market could encourage those looking to upgrade to private homes and boost demand for them, added Ong.

Christopher Chitty, Senior Content Specialist edited this story.