DPM and Finance Minister Tharman Shanmugaratnam, explained that house prices are likely to continue falling.
Housing prices have been declining slightly for about a year now as Government cooling measures affect the market and Tharman explained that the cycle is not over.
However, he also said “I don’t think the industry will crash,” because the government has been careful not to tweak too much to engineer a crash.
Tharman said that ultimately, it is the market players that will determine where the cycle goes.
Because the government had “moved early” they had avoided a huge bubble and that’s why there will be no crash, Tharman emphasised.
Property cooling measures have been slowly introduced since 2009 to address various areas of the market.
BTO construction has been ramped up to increase supply, loan limits and extra duties have been introduced to slow demand and overall, these various measures have prevented housing prices from forming a bubble.
While estimates from the Urban Redevelopment Agency (URA) showed a 1.1% decrease in private home sale prices for this quarter, Tharman also noted that it is still too early to stop the property cooling measures.