Business Times - 27 Nov 2008
Limits to what govt can do, says Mah
It cannot dictate to banks on loans or work against market forces on
By KALPANA RASHIWALA
(SINGAPORE) National Development Minister Mah Bow Tan told developers
yesterday 'there are limits to what the Government can and should do' to
ensure the long-term stability and smooth functioning of the property
'For instance, we cannot dictate to banks that they should extend loans to
companies or individuals with weak financial standing,' he said.
'We also cannot work against market forces and try to prop up property
prices artificially. Such efforts are not sustainable and will not be
beneficial to the health of the property market in the long run.'
Speaking at the Real Estate Developers Association of Singapore's 49th
anniversary dinner at the Shangri-La Hotel, Mr Mah said any action the
Government takes must be carefully calibrated.
'Any measure seen to be knee-jerk or excessive might even weigh market
sentiment down further,' he said. 'It is in our interest to ensure that
property prices move in line with economic fundamentals, as this affects
home ownership, asset values, retirement savings and other sectors of the
But he gave the assurance that the Government will keep a close watch on the
situation and will not hesitate to take further measures if necessary.
Last month, the Ministry of National Development (MND) suspended Government
Land Sales through the confirmed list until the end of first-half 2009.
Since then, MND has received various suggestions from Redas and other
stakeholders on how to help the property sector. 'We will study these
suggestions as we continue to monitor the property market closely,' Mr Mah
He also told developers that with slower economic growth 'it is inevitable
that demand will be lower and (property) prices will soften'. The official
private home price index slipped 2.4 per cent in the third quarter from Q2.
On a more upbeat note, Mr Mah said the committed pipeline of major projects
secured in the past few years will create a steady stream of job
opportunities and sustain capital spending in the economy in the next few
'At Marina Bay alone, we have invested close to $5.7 billion in
infrastructure and we will continue to invest to support the future growth
of Marina Bay and to enhance connectivity with the existing city,' he said.
The Government will also continue with several key infrastructure and
housing projects to support medium to long-term economic growth and social
needs, as well as to rejuvenate older estates. Mr Mah stressed the
importance of the real estate sector.
First, real estate services and construction together accounted for about
9.6 per cent of overall GDP and 13 per cent of total employment in Singapore
Second, the health of the property market affects other major sectors of the
economy. 'Third, as a country with the highest rate of home ownership of
more than 90 per cent, the property sector is where most of us have invested
our hard-earned lifelong savings,' Mr Mah said.
'Our economic prospects in the medium term and our fundamentals remain
strong. I urge you to continue building up capabilities within the industry
and use this period to strengthen your competitive advantages so you are
well prepared to capitalise on opportunities that may emerge when the
current economic uncertainties subside.'