Singapore’s residential property market is in a “reasonably good place,” according to the nation’s central bank.

There are signs that prices have moderated and are stabilizing, Ravi Menon, managing director of the Monetary Authority of Singapore, said at a briefing Wednesday, following the release of MAS’s annual report.

Menon’s comments signal the city-state’s confidence in reining in a property boom that has defied a global slowdown from London to Shanghai. The Asian financial hub’s housing market has seen a buoyant run after an influx of capital alongside a pandemic-induced supply shortage pushed prices and rents to record highs.

To keep a lid on apartment prices, the government doubled stamp duties for foreign buyers in April to 60% — the highest among major markets. It also raised levies for second-home buyers. Such measures were “pre-emptive” to curb investment demand from both locals and foreigners, said Menon.

The red-hot housing market has shown signs of cooling. Singapore home prices declined in the second quarter for the first time in three years, on the back of the latest property curbs. That’s after home sales reached a one-year high in May, as a supply crunch eased amid new development launches.

The surge in rental prices will take “a little bit of time to resolve” due to a “sudden reflow” of people into Singapore, Menon said. Rents for private apartments and public housing surged about 27% and 25% respectively in May from a year earlier, with Singapore leading the world for the fastest pace of rental growth for luxury properties.

Wealth Inflows

Wealth inflows into Singapore have little effect on property prices, Menon said, adding that private residential property purchases by foreigners have averaged about 4% over the last three years. There were no purchases by single family offices in the last three years and home purchases by their foreign employees are “insignificant.”

“We’re very determined to make sure that property prices keep in line with underlying economic fundamentals” and are not driven by “speculation, hot flows of money,” Menon said. “I think we’re getting there, but it’s always constant work.”