When I read the online Forbes article predicting that Singapore was headed for an Iceland-style meltdown, I almost burst out laughing at some of the assumptions made by columnist Jesse Colombo, who is obviously trying very hard to live up to his reputation as a “bubbleologist”.
While it is true that we are flush with liquidity, what is not as apparent is that we have not kept still. I am confident our authorities are monitoring the situation and have the fiscal discipline to place excess funds overseas.
Our economy has been well supported by strong reserves and healthy surpluses in recent years. We have also one of the highest savings ratios in the world.
We have taken almost draconian measures to cool the property market and these have helped to stabilise it. Also, the measures can be easily withdrawn in case of a downturn.
Although the demand for property has been strong, it is not driven by speculation and foreign interests. It is also not affected by foreign workers as most of them are staying in specially constructed dormitories.
The take-up rate has been supported by many genuine home buyers, including more young people breaking away from the family nucleus at an earlier age.
The property situation will continue to be positive in the middle to long term as the population is projected to grow till 2030.
There are still many prospective buyers and also investors who have profited from the property boom, and they are ready to enter the market.
Looking at the bigger picture, the Government is taking positive steps to improve the environment and restructure the economy. This will help us to maintain our competitive edge and capitalise on future opportunities.
Patrick Liew
* Letter first appeared in ST Forum (17 Jan)