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Singapore not relaxing property cooling measures soon, says MAS chief

28 Jun, 2019

IF REAL ESTATE developers and property buyers here are pinning hopes on the government relaxing the cooling measures soon, they can kill that thought. Monetary Authority of Singapore (MAS) managing director Ravi Menon said on Thursday that it takes time to allow the measures to work their way through since they were implemented only a year ago.

Last year, the MAS chief had warned that there was euphoria in the then hot property market and cautioned developers, banks and home buyers to proceed with care. The government, in a surprise announcement a day after Mr Menon's warning, introduced higher stamp duty rates and tighter loan limits for home purchases.

The cooling measures have since tempered demand and sentiments, prompting fresh calls for the government to relax the restrictions. But Mr. Menon dashed any hopes of the curbs being lifted in the near future when asked at the central bank's annual report media briefing on Thursday.

He said: "The early signs are good, the market is more sober now, volumes have come down, price increase has really dampened. We are not seeing any impending risk of a sharp sell-off of flats.

"There seems to be a good balance that's holding up the market in a good place." Mr. Menon said that the government will continue to monitor the property market closely, and stands ready to help ensure a healthy and sustainable market.

Responding to suggestions that Singapore might stand to gain from the recent political situation in Hong Kong, he said that there are no signs of any significant shifts of business or funds into Singapore based on data and engagement with financial institutions. Also, he does not think that the troubles in Hong Kong would tip the balance in Singapore's favour.

"Prolonged uncertainty in Hong Kong is not good for Singapore. "I think people tend to see too much through the lens of competition. There's a lot of complementarity between the two financial centres... and I think we should not lose sight of the complementarity," the MAS chief said.

Moreover, any uncertainty that leads to poorer economic outcomes in the region will not bode well for Singapore. "We should focus more on the income effects of prolonged uncertainty, than focus on small substitution effects," he added.

Apart from the recent developments in Hong Kong, fresh-from- the-oven cryptocurrency Libra from social media giant Facebook is also on MAS's radar. Describing it as a "very interesting development" and "very intriguing", the MAS chief said that the central bank has already talked to Facebook, the Libra Association - a not-for-profit organisation that will govern the payment network and manage a financial reserve for the cryptocurrency - and Facebook's partners, some of whom have major operations in Singapore.

While Mr. Menon noted that the virtual currency presents potential benefits such as bringing the unbanked into the financial system, he said that there are also some serious concerns. MAS will study this cryptocurrency carefully.

Adapted From The Business Times, June 28 2019