Sharp jump in S’pore property prices not sustainable

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SINGAPORE, June 17 (AFP): A sharp surge in Singapore property prices is not sustainable in the long-run, a government minister said Sunday.
Home prices in Singapore surged by 10 per cent last year on the back of a robust economy and are expected to increase further this year.
Rents in the wealthy city-state have also doubled this year.
The government last week released 15 new land sites for development, including eight for residential purposes, which analysts saw as a move to cool the red-hot market.
"It is very important for us to make sure that the prices do not overshoot or race ahead of the real growth in the economy," said Minister for National Development Mah Bow Tan.
"I think it is not sustainable in the long run and, of course, it is also not good for our competitiveness if prices and rentals go up too fast," Mah was quoted as saying in the Sunday Times.
Singapore revised upwards its 2007 growth targets to 5.0-7.0 per cent from 4.5-6.5 per cent after the economy grew a better-than-expected 6.1 per cent in the March quarter.
Singapore is now the eighth most expensive city in Asia in terms of housing costs for foreign expatriates, according to global human resource firm ECA International.
ECA International's latest survey of accommodation costs globally showed rentals for a three-bedroom apartment in residential areas popular with foreign expatriates have shot up 15 per cent from 2005 to 2006 to an average 3,364 US dollars a month.