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Curb supply to avert dangers of a burst property bubble

Mr Ku Swee Yong’s commentary, “Tidal wave of property supply hits S’pore” (Sept 19), was excellent in detailing the softening market for residential properties. He analysed and outlined how excess supply will hit Singapore from next year to 2017.

Anil Kumar Bhatia

Mr Ku Swee Yong’s commentary, “Tidal wave of property supply hits S’pore” (Sept 19), was excellent in detailing the softening market for residential properties. He analysed and outlined how excess supply will hit Singapore from next year to 2017.

But the real fear is that those who have booked properties and are unable to take up or pay loans start to dump the assets below the prices they paid, just to clear their debts.

This would affect financial institutions with heavy property loans. Such a property bubble would cause a general collapse of property prices and affect the business climate and economy.

This happened in the United States when mortgage lending became rampant and caused prices to slump in certain states. Once the damage is done, it would take a few years for the markets to return to normalcy.

Mr Ku’s suggestion to sell property investments would exacerbate the problem.

The authorities must look strictly at how to curb supply before things get out of hand. This would prevent panic selling and its fallout.

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