Both MND and DPM spoke about the property market, but will there be a full-fledge policy change?

In double quick time, both Minister of National Development, Desmond Lee and Deputy Prime Minister, Heng Swee Keat delivered speeches around the property markets. Both mentioned the need to provide affordable housing for Singaporeans.

 

You can refer to the transcript of their speeches here:

DPM Heng Swee Keat speech: https://www.pmo.gov.sg/Newsroom/DPM-Heng-Swee-Keat-at-the-REDAS-61st-Anniversary-Celebration

MND Desmond Lee speech: https://www.mnd.gov.sg/newsroom/speeches/view/speech-by-minister-desmond-lee-at-the-bca-redas-built-environment-and-property-prospects-seminar

 

At first glance, it may seem that these comments are a precursor to property cooling measures but on a deeper note, the Ministers seem to be more concerned about providing sustainable and affordable housing for Singaporeans which I interpret as ring-fenced policies around public housing rather than private housing.

 

MND Desmond Lee's speech

In Mr Lee's speech, he mentioned For the private housing market, we have put in place several measures over the years to try to ensure that prices move in line with economic fundamentals. This is to ensure that the property market remains resilient to economic downturns, property bubbles and external shocks like a pandemic.”, there is only a remote possibility that they will introduce cooling measures as they have already “put in place several measures over the years” and these measures are working well; property market is resilient in this pandemic! If it is already working well, why would they change?

 

He then went on “The Government is monitoring the developments in the property market very closely. We will adjust our policies if necessary, to maintain a stable and sustainable property market for all Singaporeans.” The priorities of the government is to ensure affordable housing for Singaporeans and all along, this has been done through HDB, where HDB's primary care is to cater for the housing needs of Singaporeans. 

https://www.hdb.gov.sg/cs/infoweb/about-us/vision-mission-and-values/brand-values

 

Hence, in my opinion, policies will be adjusted for public housing only but not private housing.

 

DPM Heng Swee Keat's speech

In REDAS 61st Anniversary celebrations, DPM Heng re-iterated that the government made sure that every Singaporean had a stake in our city through affordable public housing.” and mentioned “…we must continue to enable young Singaporeans to own their homes and fulfil their aspirations. This is why we pay close attention to the property market, to ensure that it remains stable.” Again, in his speech, his primary concern is affordable housing for young Singaporeans and stability (stability refers to low volatility in prices and not depressing property prices). Thus, if there are any policy changes, it will be towards public housing.

 

What is interesting is in one of the sections, DPM Heng highlighted issues around climate change and how property developments could be future-proofed and climate resilient by adopted solutions such as “the use of cool paints and reflective glass coatings to lower absorption of heat energy from the sun.” These will definitely increase building costs for new launches and I expect the costs to be passed on to consumers. It will lead to higher prices but at the same time, a better and sustainable environment.

 

In short, both Ministers spoke on the same day on affordable housing and their carefully curated speeches were focusing around providing affordable housing for Singaporeans. Hence, I expect a targeted policy changes that is ring-fenced around public housing. On the other hand, private properties prices are expected to rise gradually as cost of development of new launches rise to provide Singaporeans a better and sustainable future.

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