Property cooling measures to stay despite PAP’s landslide victory: analysts

Measures will only be lifted in 2016.

As Singapore’s ruling People’s Action Party returns to government after a crushing election victory, analysts note that the chances are slim that existing property cooling measures will be eased this year.

RHB Research said that although the strong mandate garnered by PAP has given it more headroom to relax property cooling measures ahead, policymakers are unlikely to ease measures this year because property prices remain relatively elevated.

“Despite expectations building-up for more pro-growth policies, we do not think any easing (particularly property) will be done this year, as the property price index (PPI) is still only -6.7% from its peak in 3Q13 and -3.7% YoY. There may also be push-back from the populace if asset prices spike right after elections,” said the report.

RHB said that the new cabinet will likely use a measured, data-dependent and gradual approach towards loosening. 

“We think the probability of lifting some of the ABSD cooling measures next year when islandwide property prices have fallen 12-15% certainly looks more palatable at this stage,” said the report.