SINGAPORE: The Republic’s property measures averted a potential financial crisis, according to Home Affairs and Law Minister K Shanmugam.
Speaking at a property agents’ conference on Wednesday (Feb 3), he said the Government had to step in after it saw a risk to the financial system.
Mr Shanmugam said: “We can’t legislate and stop people from buying a second or third property.
“(But) … when we saw the systemic risk – risk to the entire financial system because people were borrowing so much money to buy a second and third property on the basis that someone would come in and rent – that’s when we put in our ABSD (Additional Buyer’s Stamp Duty) and secondly TDSR (Total Debt Servicing Ratio). To try and dampen that down, otherwise the entire banking and financial system would have gone through what the US and Europe went through.”
Going forward, Mr Shanmugam said the Government has a “rough idea” on when it is prepared to lift property measures. These measures, such as the ABSD, were first introduced in 2011. Mr Shanmugam added that key signs the Government is looking out for include a healthy economy and market stability.
Property agency ERA said its agents now feel more assured after hearing Mr Shanmugam’s views.
Said Mr Jack Chua, ERA Realty’s CEO: “Agents are happy because basically, they wanted some assurance that the Government is doing something. And I suppose everyone doesn’t want to see a property crash in Singapore. The Government also. So the minister has assured people that they will not want to see a property crash in Singapore, I guess that is a very good assurance.”