Last Thursday Mr Kwek Leng Beng, chairman of City Developments, one of the largest property developer in Singapore broke the silence in the local newspaper The Straits Times. He said that it’s time to review the cooling measures done by the Housing Development Board (HDB) as Urban Redevelopment Authority (URA) showed flash estimates of private residential prices.

It showed that there had been consecutive declines over two quarters, which fell to 209.3 points at the end of June this year. This was also echoed by Teo Hong Lim, chief executive of Roxy-Pacific Holdings.

They accounted this perpetual decline to the cooling measures implemented by HDB which meant to reduce the price hike that was getting excessive despite multiple cooling measures.

These were implemented by the Singapore government to prevent the recession caused by Lehman Brothers in 2009 when they saw the massive expansion of global liquidity with near zero interest loans for banks.

These included limitations to maximum quantum of housing loans and mortgage servicing duration that are limited to their salary, as well as slapping additional stamp duty charges and loan to value ratios which determines the amount of cash to be paid up front.

However, Minister of Finance Mr Tharman Shanmugaratnam argued that the property cycle is not yet over. He stated that Total Debt Servicing Ratio (TDSR), which limited the maximum loan quantum for housing loan, was not a cooling measure but a permanent implementation. This was cited to be the main cause of the decline in private property sales this year.

It is quite known that Singapore currently is facing a property bubble as they are seeing an oversupply of property where the people cannot afford to purchase the flats due to the “cooling measures” which does not apply to the investors but also to the local citizens as well.

With this in mind, it will depend on how the government will react to brace the economy for the outcome, else we may see history repeating again, in one of the strongest financial economies in Asia.