Can any government in the world control its property market? If it’s way too heated up, to cool it down slowly instead of having the bubble bursting and affecting everyone and tha banks? The answer seems to be a yes. According to an online article, Singapore’s National Development Minister Khaw Boon Wan said that the government is using the cooling measures to ensure the property market has a ‘soft landing’. In fact, it was quoted that HDB resale prices have fallen 37 percent. Is this enough?
Some of the Members of Parliament however cautioned that whatever is good, when overdone may not be healthy. Many of the seniors in Singapore needs their property to be of certain value to support their old age retirement plan. Mr. Khaw replied that the government will be cautious not to cause these negative effects. The prices of Built to Order flats remain to be affordable. 89 percent of five-room flats were sold under S$450,000, 81 percent of four-room flats were sold below S$350,000 and 90 percent of three-room flats were sold below S$250,000. The affordability index states that the prices should be lower than a buyer’s 4 years annual salary. In this case, these BTO flats are considered affordable, depending on what the applicants actually apply for based on their existing income.
Personally for Malaysia, I do not want too much government intervention for property unless they are able to really know what the demands would be. The reason is because most of the time, only the private developers would know where the demand and what the demand would be. The government has not been a specialist in the building of homes and should not attempt to be one. Facilitate, encourage and perhaps motivate through some additional incentives but do not meddle with the property market. Singapore is a very different market because it is much smaller and was controlled right from the beginning. For Singapore, it’s better because the government can sort of ‘control’ the market’s direction through it’s HDB planning. Anyway, ‘soft landing’ cannot last forever. Think further and buy value.
written on 13 Mar 2015
Next suggested article: Penang affordable homes? RM300,000 – RM650,000 lah