Singapore launches new realty market measures

The credit environment, with lending rates on home loans below one percent in some cases, is another factor boosting buyer sentiment.

The government said the latest announcement was necessary to avert a potential property meltdown should the global economic recovery stall, which would have an impact on Singapore's trade-dependent economy.

If growth falters and the market corrects, “property buyers could face capital losses, with implications on their own finances and the economy as a whole,” the government said.

“Moreover, the current low global interest rate environment will not continue indefinitely, and higher interest rates could have severe implications for buyers who have overextended themselves.”

Analysts expect the latest measures to slow down the property price surge, giving “genuine” buyers a chance to purchase private property.

“Today's set of measures safeguard the interest of genuine home buyers, those who are owner-occupiers,” said Tay Huey Ying, director for research and advisory with Colliers International real estate consultancy.

“I don't think prices will fall but I think these will help to keep price growth in check,” she told AFP.

Chua Yang Liang, head of regional research with Jones Lang LaSalle, expects property prices to rise two to three percent on a quarterly basis with the introduction of the new measures.

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