The Monetary Authority of Singapore (MAS) has said that it is still too early for the property cooling measures to go away. Unlike the car financing sector, the housing sector has yet to achieve the intended levels. The authorities are cautious about a sudden forward surge in the market should the measures be prematurely lifted.
Household debt levels have become more manageable as the debt servicing ratio helped keep new loans portfolios realistic and banks are feeling a reduction in the percentage of non-performing loans. The ultimate aim is a sustainable pathway for the property market – a balance between growth and affordability.
Though the market feels like it has been slowing down for quite a few quarters now, the numbers tell another story. Property prices have fallen 9.4 percent since it’s peak in Q3 of 2013, but between 2009 and 2013, prices rose 60 percent while income rose only 30 percent. Clearly the numbers are disproportionate and it will be some time yet before the market reaches a comfortable equilibrium.
Moving forward, the private resale market is showing signs of bottoming out, and investors who have been sitting in the sidelines may come back into the fold as long as interest rates remain low and home prices steady.