Probably no property bubble here yet: MM

Dear MM Lee,

I refer to your statements made at a dinner hosted by the Association of Banks in Singapore as reported by Straits Times on 26th Jun.

You said the sharp property price rise is part of the total liquidity in the whole world and that foreigners see Singapore properties as cheap. But Malaysian properties are even cheaper, yet we don’t find the same sharp rise there. Why did the total liquidity in the whole world came flooding here instead of flooding Malaysia for example? So you cannot attribute our sharp property price rise solely or primarily to the total liquidity in the whole world. Because the total liquidity in the whole world doesn’t explain why Singapore property prices have shot up so much but not those of neighbouring Malaysia.

Ultimately, you cannot avoid answering the question of why there is a real underlying demand for residential property despite prices being as sky high as they are now. The answer as everybody now knows is the half a million or so people you have added to Singapore in a short span of just a couple of years without a concomitant increase in the number of houses being built. This episode clearly demonstrates the government’s utter lack of foresight that you so often tout about.

If investment return is what the Indonesians, Thais or Malaysian Chinese are coming for, they must surely know that there is an abundance of foreigners here who would readily pay a premium to buy or rent from them because of the acute shortage in housing now. Thus, no matter how we look at it, we can always trace the problem to the same root cause which is the severe imbalance between supply and demand for housing caused by inappropriate and inadequate government policies.

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