More cooling measures were rolled out by our neighbour just last week. Of course the ‘WE’ in the title of this article is not kopiandproperty.com It’s the Real Estate Developers’ Association of Singapore (REDAS) in their joint statement on the Singapore government’s latest property cooling measures. They disagree with their government’s latest action aiming to cool the market. They said that there is no rationale behind the curb. This is the article in FreeMalaysiaToday.com Singapore developers attack cooling measures According to an article by Bloomberg, the three key reasons for the Singapore government’s latest cooling measures were because of property prices (it has rebounded since middle of 2017), En-bloc sales (perhaps the activities were too strong for the government’s linking) and local demand (local buyers are now dominating the buying and it’s no longer the foreign speculators). Here’s that article in Bloomberg: Three Charts that help explain Singapore’s new property curbs
Elaborating further in the FMT article, REDAS has claimed that the Singapore property market is only in the early stages of a recovery. They shared that the market has only picked up last year and the volume of transactions is within expectations. Thus, the recent measures are tough and the government should let the market find its own course in due time. The government has raised buyers’ stamp duties for entities such as developers and tightened borrowing limits for individuals taking their first housing loan. This tightened rules were announced late Thursday (5th July 2018) and came into effect hours later. This was because the central bank (Monetary Authority of Singapore) noted the ‘euphoria’ in the property market. This is not the first time that the government has stepped into the property market to restrain demand and prices. The next day, Singapore’s benchmark Straits Times Index dropped 2% as property developers and banks led declines, with City Developments Ltd. and UOL Group Ltd. sliding more than 13% each. Here’s another article in Singapore Business Review.
I think it’s fair to note that the property prices cannot be left to the market alone. If it’s fully FREE without any intervention from the government, then the property bubble will burst in the near future once the majority are priced out of the market. That was one major reason for the 2008 mortgage crisis which happened in the U.S. The failure to afford a property will ensure the owners of these properties continue to be richer while the tenant continue to spend a substantial amount of their income to rent a place which they could never own. This is the reason why Malaysia’s new government is pushing for 1 million new homes within the next 10 years. (Affordable ones of course). Here’s an earlier article which tells why it’s so important for everyone to own a property, even if it’s just a small one. Anyway, I do not think the Singapore government would ease their cooling measures after listening to REDAS’ statement. As for Malaysia, this happened: Malaysians within B40 and M40, a special loan scheme is coming by August 2018? Hmm… Happy following.
written on 9 July 2018
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