Singapore’s deputy prime minister warned that low interest rates can lead to distortions in asset prices, amid speculation that the government may take fresh steps to cool the housing market.

“The interest rates today are ultra low, and in some cases even negative, so this can lead to a significant mispricing of asset prices and a significant risk of investing in the wrong places,” Heng Swee Keat said in an interview with Bloomberg News on Wednesday.

Singapore’s residential property market has made a rapid recovery after the pandemic sent the economy into its worst recession, fueling speculation that authorities could impose cooling measures for the first time since July 2018. Government ministers including Heng have warned that they don’t want the market to run ahead of economic fundamentals.

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