A simple illustration of how I see Singapore’s real estate market is really like.
The tight-rope walker is akin to our government; specifically the Ministry of National Development & Monetary Authority of Singapore, who watches for all financial stability issues surrounding our little red dot and beyond.
While it is necessary for inflation to take place, and asset prices to grow, the rate of growth (Gradient of the tightrope) must be gradual and in pace with the rest of economic & income growth & wealth distribution among the masses.
Why is inflation necessary you may ask?
1. An increase in wages (Income inflation) increases consumption and spins the wheels of an economy, attracting foreign investments. 2. Goods & services inflation (We rely mainly on imports) with income stagnation means a declining quality of life which is unacceptable for any country.
3. A steady growth in prices means a steady growth in the economy & a healthy national psyche.