Speculative bubble in property market

Speculative bubble in property market a risk, says MAS
By Yasmine Yahya/Ryan Huang, Channel NewsAsia

KEY POINTS:

1. The rise in risk appetite and sharp rebound in financial markets since the start of the year may have outpaced economic fundamentals. Asia has bounced back from the financial crisis faster than expected, the global economic outlook remains uncertain. The recovery in the world's biggest economies – the United States, Japan and the European Union – has largely been dependent on government stimulus.
2. Despite such uncertainties in the global outlook, Singapore's property market has taken on its own dynamics. Private home prices rose almost 16 per cent in the third quarter – the highest quarterly increase in almost three decades.
3. MAS said although the government has already introduced several measures in September to temper the exuberance in the market and pre-empt a bubble, more measures might be needed.
4. On a brighter note, MAS said local banks and insurers have remained resilient through the crisis, maintaining high capital and liquidity ratios. It added that local banks' earnings have dipped but remained above market expectations.