Here are three good reasons why cooling measures might not be eased after all

The MAS is wary of renewed froth in the market.

Analysts and market watchers are hoping against hope that some property cooling measures will finally be lifted next year, but the Monetary Authority of Singapore has three perfectly good reasons at its disposal if it chooses not to ease measures after all.

The central bank’s latest Financial Stability Report showed that the MAS is particularly concerned about renewed froth in the property market. This is because funds continue to flow into asset markets, and property prices in regional markets such as Hong Kong, Malaysia, and Thailand remain high.

“Even as the domestic property market moderates, MAS continues to remain watchful for signs of renewed froth on the back of still-elevated prices,” said the MAS.

Apart from that, the MAS highlighted that price declines have been uneven across different market segments, with prices in the Outside Central Region (OCR) still hovering at over 30% above their trough during the Global Financial Crisis (GFC).

The price mismatch between buyers and sellers is also a key concern for MAS. The central bank highlighted that transaction volumes have declined and remain subdued across the market, with current transaction activity less than half of that seen between 2010-2012.

“The current condition in the property market could reflect a mismatch in price expectations between sellers and buyers,” the MAS said. 

“Following the series of measures introduced since 2009 to stabilise the property market, risks in the sector are abating. Nonetheless, some risks remain,” the MAS said.