Singapore’s inflation rate has jumped to a three-year high in August as housing and transportation costs rose despite an economic slowdown.
The Statistics Department released on Friday that its consumer price index rose 5.7 percent last month from a year earlier, the most since October 2008. Prices had risen 5.4 percent in July from the previous 12 months.
The housing prices rose 9.9 percent during the previous year through August while transport costs surged 12.5 percent.
Singapore economy grew 0.9 percent in the second quarter from a year earlier. The government expects gross domestic product to expand as little as 5 percent this year, down from 15 percent growth last year.
Property experts in Singapore and would-be customers alike are celebrating the most recent changes to public housing policies in the Lion City. An additional 8,000 flats will be available in September, as part of a boom in combined launches.
Part of the new policies includes a rise in the qualifying income ceiling, expected to benefit young couples and singles. Under the new regulations, those over the age of 35 and unmarried are eligible to buy a resale flat and receive loans from the Housing Development Bank. The ceiling used to sit at S$3,000 but has now climbed to S$5,000, making large swathes of the population eligible who previously were not.
Most analysts agree that the overall impact of the changes is to take some demand pressure away from the resale market. But the impact on prices is less certain and unlikely to be immediate. They said they will only get a better idea over the next few quarters.
Some observers expect cash premiums, known as cash-over-valuation (COV), to ease in the next few months.
HDB has promised 25,000 more new flats next year, based on what it said the construction industry can handle.
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