Property here may sizzle from QE3 heat
The possibility of a fresh wave of capital flows into
Singapore as a result of the latest round of quantitative easing (QE3) in the
United States has raised the prospect that the property market could heat up
again. This, in turn, could lead to a new round of government measures to keep
prices in check.
The Federal Reserve's decision to pump US$40 billion into
the US economy each month until sustained jobs growth kicks in, while welcome
news for the struggling global economy, also created fears that loose monetary
conditions in the US may push funds into the region in search of yields and fan
asset price inflation.
An influx of foreign funds into the property market here could well push the government to introduce new measures or tweak existing ones to prevent a bubble from forming, said economists and property consultants.
An influx of foreign funds into the property market here could well push the government to introduce new measures or tweak existing ones to prevent a bubble from forming, said economists and property consultants.
Already in the region, Hong Kong has moved swiftly to
introduce mortgage curbs. In its fifth round of mortgage-tightening measures,
the Hong Kong Monetary Authority announced that it would limit the Cashmaximum
term of all new mortgages to 30 years.
Additionally, mortgage payments for investment properties
cannot be more than 40 per cent of buyer's monthly incomes, compared with 50
per cent previously.
The government has repeatedly stated that it remains ready
to take further action to cool the property market should the situation call
for it.
Source: Business Times – 18 September 2012