Singapore MAS Says Property Cooling Measures Necessary

Singapore's central bank said it is not yet time to ease the property cooling measures as interest rates remain low and investors consider property investment as safe.

Property cooling measures are necessary, the Monetary Authority of Singapore Chief Ravi Menon said at the media conference on Thursday.

Releasing the annual report of the MAS, Menon said the underlying demand for private residential properties remains firm amidst a continued low interest rate environment. Also, investors continue to search for yield and safety in property markets across the world, he added.

Moreover, the calibrated adjustments by the government do not signal the start of an unwinding of the property cooling measures, as some commentators have suggested, the MAS said.

The property market has substantially stabilized over the last three years, yet the risk of a renewed unsustainable surge in property prices is not trivial, Menon cautioned.

However, amid tightening measures across the world, easing in Singapore would send a wrong signal, he said.

The MAS forecast the city-state economy to grow 1-3 percent this year, with a strong likelihood that growth would be higher than the last year's 2 percent.

Menon said the current monetary policy stance remains appropriate in view of the stable inflation and growth prospects for 2017.

The MAS applies the exchange rate against a basket of currencies within an undisclosed band as its monetary policy tool. At the April meeting, the bank maintained the rate of appreciation of the S$NEER policy band at zero percent.