Shanmugam: Elections 'not a factor' in property cooling measures

It's about the state of supply and demand, prices and linkage to wages
By, Joyce Lim, The Straits Times, 10 Jul 2015

Property cooling measures are not linked to general elections, Minister for Foreign Affairs and Law K. Shanmugam said yesterday.

Talk of possible tweaks to the longstanding measures has been sparked by seven straight quarters of declining private home prices.

 
Mr Shanmugam was asked about a possible review of the measures, which include borrowing limits, at a property seminar yesterday.

He said: "Someone just told me they are all hoping that after the elections it would be taken off. I don't know why people link it to the elections.

"Cooling measures came in a long time ago. They either make sense or they don't make sense... Elections by itself is not a factor... what is, is the state of the economy, the state of supply and demand, the prices and the linkage to wages."

Mr Shanmugam was the guest of honour at the inaugural RE/MAX Asia Pacific Convention at Raffles City Convention Centre.

The event, attended by 500 real estate industry figures, saw the signing of a memorandum of understanding between RE/MAX Singapore and RE/MAX Australia, RE/MAX New Zealand, RE/MAX Japan and RE/MAX Korea.

The alliance would see the five companies offering cross-border training opportunities to their real estate professionals.

RE/MAX Singapore also announced the launch of its Real Centre Academy (Asia), which will provide regional and international courses catering to the region. Participants will have the opportunity to get hands-on experience in international real estate transactions.

In a one-hour dialogue session moderated by Dr Lim Lan Yuan, president of The Singapore Institute of Surveyors and Valuers, Mr Shanmugam was asked how the Greek debt crisis could affect Singapore. "Life will carry on. Singapore is always being seen as a place which is safe... our dollar is strong, Government is stable, no major changes in policy, Government doesn't borrow money, land prices are stable," he replied.

He believed that with the "right measures", Singapore would be able to ride out the crisis.

As for how falling stock prices in China could affect Singapore, Mr Shanmugam said this could affect the ability and willingness of Chinese people to invest overseas and that could have an underlying effect on Singapore.

Ease property cooling measures? Depends on several factors, says Shanmugam
"I don't know why people linked it to the elections ... The state of the economy, the state of supply and demand, the state of prices and the linkage to wages - those are the factors," says the Law and Foreign Affairs Minister. 
By Eileen Poh, Channel NewsAsia. 9 Jul 2015

The easing of property cooling measures will depend on factors such as the state of the economy, wage growth, and the situation in the property market, said Law and Foreign Affairs Minister K Shanmugam.

He was speaking at a real estate convention on Thursday (Jul 9), organised by property firm RE/MAX Singapore, in response to a question on a review of the cooling measures currently in place.

The question is one which Mr Shanmugam said he has been asked at almost every property convention he has been to, as housing prices continue to fall, and sales volumes remain low.

While the minister candidly admitted that he is not in a position to decide when to scale back the property cooling measures, he gave a glimpse into what could be some of the influencing factors.

"Somebody just told me they are all hoping that after the elections, it would be taken off,” said Mr Shanmugam, drawing laughter from the audience.

“But I don't know why people linked it to the elections. These cooling measures came in a long time ago, they either make sense or they don't make sense. And elections by itself is not a factor. What is, is the state of the economy, the state of supply and demand, the state of prices and the linkage to wages - those are the factors."

Mr Shanmugam also said the Government had introduced measures such as the Total Debt Servicing Ratio due to a "serious risk" of an overborrowing going into the real estate industry.

On the private property market, Mr Shanmugam said Singapore has to remain open to foreign investments in the property sector. But at the same time, private home prices must stay within reasonable reach for Singaporeans who aspire to own them.

"It's very difficult to explain it politically, because politically all the opposition has got to say is, 'You see these prices - they are sky high, you see the foreigners cavorting in Sentosa, it drives up the envy factor... They have got it, I don't have it’," said Mr Shanmugam.

"That's not the kind of conversation we used to have in Singapore. We used to say, ‘He's got it, but if I work hard, I can also have it’. Some people are turning that conversation now into ‘He's got it, I don't have it, why is he having it?’. So we have to point out that the reason why Singapore has been successful is because people were prepared to work hard," Mr Shanmugam added.

Turning to regulations in the real estate industry, Mr Shanmugam said there has been feedback from property agents, and his team has made some suggestions for the Council for Estate Agencies, the statutory board which licenses estate agents, to change some of its approaches and framework.

The one-hour dialogue also covered issues outside the property sector, ranging from the Greek crisis to the ASEAN Economic Community, and the impact of China's recent stock market plunge on the region.

Mr Shanmugam said the plunge may impact on the Chinese's liquidity and ability to invest: "China is now number one or number two in terms of investments into this region, and also in terms of trade, then it could have a real impact on the economies on all of us.”