Worries about dangerously inflated house prices in Asia being fanned by record low interest rates have led to speculation that countries including South Korea and Australia could move to tighten monetary policy.
Singapore last month acted to cool the property market by releasing more land and making it harder for home buyers to defer payments, but analysts said policymakers were likely to hold off on further steps for fear of derailing a still patchy economic recovery.
Singapore home prices started rising in Q2, analysts say, contrary to a 4.7 per cent decline for that quarter shown in the Urban Redevelopment Authority's index, which is not seasonally adjusted.
Huge crowds have been snapping up units at new residential launches in Singapore, with reports of buyers queuing for hours and leaving blank cheques with agents to secure properties.
"The numbers are backing up the anecdotal evidence we've seen - if anything they are understating it," said Vishnu Varathan, an economist at 4CAST in Singapore. "Policymakers will be acutely aware of the risks of tightening too fast... At this point I think they will wait and see."
Varathan and most economists expect the Monetary Authority of Singapore to keep policy neutral when it releases its half-year policy statement later this month. Singapore forecasts its economy will contract 4-6 per cent this year and sees a subdued recovery likely continuing in 2010.
Prices of government-built apartments, which house about 85 per cent of Singaporeans, rose 3.2 per cent in the third quarter from April-June, faster than the 1.4 per cent gain in the second quarter, raising the floor for private home prices.
Some analysts think rising house prices in Singapore, Hong Kong and China are yet to peak, given a preference for property among investors and a faster-than-expected economic recovery.
By Reuters
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