The Ministry of National Development (MND) said it is too early to relax the property cooling measures, according to media reports.
The cooling measures include extra stamp duties to rein in speculative buying as well as the total debt servicing ratio (TDSR) framework which was rolled out last year.
Even though there is decline in home sales, prices have remained relatively stable.
“It is still too early to relax the property market cooling measures. If the measures are removed prematurely, we could see a sharp increase in demand and housing prices,” said a spokesman.
He added that the measures were placed to “ensure a stable and sustainable property market.”
MND’s statements came after property developer Kwek Leng Beng warned of a possible impact on the country’s the reputation as a global city, while calling for a review of the property cooling measures.
The National University of Singapore (NUS)’s Residential Price Index showed that resale home prices rose 0.8 percent month-on-month in May, after dropping for nine months, while Urban Redevelopment Authority (URA)’s flash estimates for private home prices showed a 1.1 percent decline in prices in Q2 2014 or its third continuous quarter of price decrease.
Christine Li, OrangeTee’s Head of Research and Consultancy, said the government will remain cautious since interest rates remain low and Singaporeans are still keen on investing in property.
“Four years ago, mass market units were about $700 to $800 psf. Now, the more attractively priced units are already nearing $1,000 psf,” she noted. “I think upgraders from Housing Board flats in particular will still prefer a steeper price correction.”