There is probably no property bubble in Singapore’s property market! Minister Mentor Lee Kuan Yew mentioned this on 26 June 2010 while speaking at a dinner hosted by the Association of Banks in Singapore. While many Singaporeans may have been holding back from investing in property, this very rare statement by MM could be the assurance they need to move forward to invest into property. We know MM is very careful about what he says. He still is regarded as one of the best visionary and excellent leader in the world. So will his recent statement carry any weight in persuading Singaporean not to worry about property here becoming a bubble?
“The sharp price rises that have been seen are ‘part of the total liquidity in the whole world system’, said Mr MM Lee, noting that interest rates are low, and foreigners still see properties as affordable. ‘Even if we cap our excess, people in Hong Kong, Indonesia, will say, compared to what I have to pay, Singapore is cheap, let’s buy it,’ he added. ‘And apart from landed properties, they can buy into any condos.”
Still, he pointed out that the Government has taken measures to address concerns relating to the market overheating, including releasing more land to developers and putting in place more stringent rules for buyers when borrowing from banks to finance property.
‘More land is being released, to dampen the enthusiasm of everybody rushing for the latest release, and we’ve told the banks to be more prudent and have a higher downpayment,’ said Mr Lee.
‘These are the precautions we can take, but it does not stop the Indonesians or the Thais or the Malaysian Chinese or the Filipino Chinese from coming here and saying, ‘Compared to what I have to pay in my country, this is cheap’ .’
Mr Lee was responding to a question by a Standard Chartered banker who had asked about whether he was worried about property prices here.
It’s funny indeed. Singaporeans know that many foreigners are excited about buying Singapore properties and are coming in to grab the best units in the market. Yet many Singaporeans have doubts in investing in these properties. I wonder why? Do we know something these foreigners don’t? Or could it be we just don’t have the right acumen to be a smart investor? Maybe it’s just our “sheltered upbringing” that has robbed us of that smart intuition.
Looks like we just need to have more faith in our own land than the foreigners. In a land scarce Singapore, property prices will only go north in the long run. If we can’t see it we just need to look at our past and that should be sufficient evidence of how far we have come.
Some of the above info can be found in the article in 26 July 2010 -The Straits Times © Singapore Press Holdings Ltd
