It is important to prevent the Singapore housing bubble from getting out of hand, National Development Minister Khaw Boon Wan

December 26, 2013 Leave a comment

Housing bubble must be kept in check: Khaw

Thursday, Dec 26, 2013

Rachel Au-Yong

The Straits Times

It is important to prevent the housing bubble from getting out of hand, National Development Minister Khaw Boon Wan said in a Facebook post on Monday. So despite the unhappiness which declining prices could lead to, cooling measures are needed, he added. “We cannot eliminate (the) property cycle but we can try to keep bubbles less bubbly. “This means taking away the punch bowl when the party is getting hot, much to the unhappiness of sellers and developers. But this is the right thing to do.” Sharing a link to a New York Times article on the housing slump in Ireland, where home prices have halved since its peak in 2007, he said “the bubble and its inevitable bust bring huge misery to many”.Analysts said the post is most likely a response to home owners, who may be worried that their assets’ value will be eroded.

Cooling measures, including a lower mortgage servicing ratio, have brought the median cash-over-valuation to the lowest in five years. It fell to $8,000 last month ahead of forecasts that it would reach $10,000 by the year end.

SLP International research head Nicholas Mak said public housing should be safe, with the risk of a housing bubble low.

“In 2010, demand far outpaced supply. That’s why the Government ramped up supply then,” he said. “The demand is still here… but the next thing is for HDB to engineer a soft landing where supply is just enough to meet demand in 2014.”

Mr Khaw announced earlier this month that the Housing Board will start to taper supply next year, with experts believing it will dip from the current 25,000 units a year to about 20,000.

Filed under Macro Trends

Unknown's avatarAbout bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

Leave a comment