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Measures to cool property & car markets see some success

Posted on 22 May 2013 | Comments Off

Singapore’s central bank has said its macroprudential measures have achieved “some degree of success” to cool the property and car markets, and it will recalibrate them as market conditions change.

Speaking at a dinner organised by the Asian Bureau of Financial and Economics Research on Tuesday, Ravi Menon, managing director of the Monetary Authority of Singapore (MAS), said its macroprudential measures will support monetary policy and financial supervisory policies to secure sustainable asset prices and financial stability.

He said the central bank faces several key challenges ahead when implementing policies.

Externally, these include a “wall of money” and low interest rates that could potentially set off asset market bubbles. These could in turn affect consumer price stability and financial stability.

Domestically, Singapore is also facing a “demographic cliff that will tighten labour markets” and potentially set off a wage-price spiral that could unhinge inflation expectations.

Recently, Mr Menon said the MAS had to step in to moderate price increases in the property and car markets.

It was concerned that a sharp rise in asset prices could have implications for both price stability and financial stability. Spikes in Certificate of Entitlement (COE) prices could also affect consumer price stability.

As a result of MAS’ measures, “property prices finally appear to be stabilising,” Mr Menon said, with price increases dipping below 2 per cent last quarter compared to the previous quarter. COE premiums for cars have dropped 25 per cent since MAS’ restrictions on car financing in February.

Meanwhile, Mr Menon said MAS’ exchange rate-centred monetary policy remains relevant and the central bank will continue to use the exchange rate as its monetary policy tool to keep inflation in check.

He said: “Singapore’s fundamentals remain sound. Fiscal prudence, financial discipline, minimising debt and living within our means will provide us policy space and buffer to weather whatever comes ahead. This is an advantage most countries do not have.”

Source : CNA – 22 May 2013

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Posted in General, Property Market / Real Estate

Tagged car market, Certificate of Entitlement, COE, MAs, Monetary Authority of Singapore, Property Market, Singapore, Singapore Property

Singapore property to remain resilient

Posted on 2 May 2013 | Comments Off

Singapore’s domestic-driven sectors such as construction, real estate and related financing are expected to remain resilient, according to a central bank report.

“The level of output in the economy will further converge to its underlying potential, while the labour market remains at full employment, in part reflecting supply-side constraints,” noted the Monetary Authority of Singapore (MAS).

There are also potential risks in the external economy, while pressure from economic restructuring could result in higher business costs in the country.

MAS maintained its consumer price index inflation forecast at three to four percent, while core inflation is expected to range between 1.5 and 2.5 percent.

Meanwhile, Singaporeans were slightly more optimistic about the economy, especially in job prospects and personal finances resulting in the rise of spending intentions, according to a Nielsen study.

Singapore’s consumer confidence index rose a point to 96 points in Q1 this year from the previous quarter. However, it is at the same level compared to Q1 2012.

“Our latest survey results show that consumers in Singapore are feeling slightly more upbeat about their job prospects, personal finances and the future recovery of the economy. The strengthening consumer outlook was also reflected in spending intentions,” said Luca Griseri, Head of Financial Services at Nielsen for Singapore and Malaysia.

Source : PropertyGury – 2 May 2013