Home prices are likely to fall further before the government rolls back the property cooling measures which were imposed since 2009, according to Standard Chartered in media reports.
“You would start to take away some of these measures if price growth reaches a certain level of equilibrium,” said the bank’s CEO for ASEAN, Lim Cheng Teck. However, he believes this is not the case yet.
Chesterton Singapore’s Managing Director Donald Han also holds a similar view: “It’s still too early to remove curbs. The government will monitor but their fingers won’t be pressing any buttons at this point in time.”
Although Lim declined to provide an estimate on how much correction is needed before the property curbs are withdrawn, CapitaLand forecasted in February that a five to 10 percent drop in home prices could goad the authorities to act.
Based on statistics, private home prices in Singapore dropped 1.3 percent in Q1 2014, its biggest decline since June 2009, following a 0.9 percent dip in the previous quarter.
Property curbs implemented in the past five years include the additional buyer’s stamp duty (ABSD), lower loan-to-value (LTV) ratios, seller’s stamp duty (SSD), higher levies on foreign buyers and the total debt servicing ratio (TDSR) framework.