'Even if we cap our excess, people in Hong Kong, Indonesia, will say,
compared to what I have to pay, Singapore is cheap, let's buy it,' he added.
'And apart from landed properties, they can buy into any condos.'
Mr Lee, who was speaking at a dinner hosted by the Association of Banks in
Singapore, said that the Government is convinced that there is real underlying
demand for residential property.
'So it's probably not a bubble yet,' he
- Ariticle "Probably no property bubble here yet: MM Lee" [Link]
Gee, I thought I heard that one of those Sentosa Cove bungalows was sold for $36M[Link] recently so we have to wait for those bungalows to go for $72M a piece before someone in govt admits there is a bubble? Also, MM Lee said that prices are rising because foreigners from places like Hong Kong find our property cheap so we shouldn't try "cap our excess" and keep prices under control - yes MM Lee, let them spiral up! Hong Kong and China had a big surge in property price and the govt there implemented drastic curbs to slow the bubble[Link] - yes, the govt there recognised there was a bubble and implemented measures to put things under control. Yet we allow the excess demand from these countries to spill over into Singapore causing prices to surge, Singaporeans who need housing will end up paying higher prices.
By saying that prices are rising due to foreign demand, MM Lee contradicted his own minister [Link]. If what MM Lee said is true, there are commonly used and effective measures to curb such imported demand for property e.g. in Australia foreign owned property can only be sold to Australians.
We have to guard against bubbles because the damaging effects of one can be serious and long lasting. But to be able to avoid trouble the govt has to be on its toes and detect it before it is too late - MM Lee sees no bubble so his ministers will now take the cue and do nothing as prices rise.
Robert Shiller is a rigorous and thorough academic who is careful about making assertions ...but he has turned somewhat pessimistic about the US housing market. Listen to what he said recently about possible long lasting effects the bursting twin bubble - stock market + housing - in the US : [Link]. Other countries have handed us lessons we cannot afford not to learn...and if the govt doesn't learn, it will again be caught off guard .....hmm, that is something that happens quite often these days.