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Potential cooling measures and the rush to buy properties

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property cooling measures

Potential cooling measures

Cooling measures are usually steps taken by the government to cool down the market. It could to cool down the stock market, it could be the property market. It could be just the market in general. One such cooling measure for example would be the removal of Developer Interest Bearing Scheme (DIBS) many years ago because there were too many speculative property purchases happening in the property market then.

Another one would be the Real Property Gains Tax (RPGT) which was introduced so that buyer would have to hold the property longer, else they would have to pay tax if they sold earlier than 5 years. In some advanced property markets, they even have taxes levied on buyers and sellers and this is not like RPGT in Malaysia which will only be applicable if there are profits. The taxes are basically applicable to all property transactions. Thus, if there are signs for such cooling measures, the market may react with intensity to quickly complete the purchase.

potential cooling measures

Article in channelnewsasia.com. According to statistics released by the Urban Redevelopment Authority (URA) on Monday (Feb 15), sales of private residential units increased by about 32% versus a month before. (WOW) If it’s based on year on year basis, then new home sales in January 2021 is 159.5 percent higher!

Ms Christine Sun, head of research and consultancy at OrangeTee, said that the figure was the strongest January sales since 2013, when 2,028 units were transacted. She said that the buying rush to speculation of potential cooling measures. She said, “Even if cooling measures were not implemented, buyers may still be in a better position to ink a unit sooner rather than later as prices of homes are likely to rise further since the global economy is expected to pick up this year.” To read more details please read in the Article in channelnewsasia.com

When the country starts to break free from COVID-19 effects

Do not get me wrong, Singapore has just started vaccinations and it will likely take a while. Probably towards Q3 of this year if everyone follows their schedule. This meant that COVID-19 worry remains. However, what has happened is that when things start to get better, people do continue to buy what they needed. Perhaps it got delayed from 2020 but demand has now restarted.

When a similar situation starts to happen in Malaysia

If we are looking at a similar situation, then this may also be something which will be coming too. Not just the demand for property yeah, also the cooling measures too as soon as Bank Negara Malaysia (BNM) felt that there’s too much speculative buys in the market. Happy understanding and deciding. If anyone wanted to say, ‘but Singapore market is different from Malaysia…’ My reply is a simple one. During the H1 2020, our residential transactions alone topped 75,000 units. I rest my case.

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