Close watch on property boom, too

THERE is no ’single trigger point’ that will set off alarm bells, but the Monetary Authority of Singapore (MAS) is closely watching developments in the property boom.

‘We watch these developments carefully, in particular the risk of property prices taking a momentum of their own,’ MAS managing director Heng Swee Keat told the media yesterday.

From a central bank and regulator’s perspective, MAS’ policy concerns are in two broad areas - the impact of rising prices on costs and on the stability of the financial system, he said. Already, the recent rapid rise in rentals has led to a rise in business costs, which would eventually be passed on to consumers.

The banking sector’s exposure to the property and construction sectors is ’significant’, and housing and related business loans have grown over the last few quarters, Mr Heng added. ‘So for both these reasons we will be watching developments in the market very carefully.’

Source: The Business Times, 26 July 2007