I welcome the move by the Government to put curbs to prevent a bigger bubble on the property market. It is necessary and desirable.
The frequent speculation in the property market is an example of the failure of the market to produce the right results for consumers. It allows certain parties to take advantage of the ignorance of consumers to make excessive profits for their businesses. Another example is the market for financial products.
We need the market to be better regulated to work better in producing fair outcome for all parties. Excessive profiteering, through deceptive means and abuse of pricing power, should be stopped. The regulator has to act to protect the interest of consumers, rather than to expect consumers to find redress through legal means - as they not have the financial resources to engage lawyers.
We have similar problems with public transport and the telecommunication services. They also need to be better regulated to ensure the interest of consumers and businesses are better balanced.
The government policy to allow matters to be decided by the market has boosted the profits of businesses but has caused hardship to consumers. It is time for the policy to be reviewed and for better regulation to be introduced.
Tan Kin Lian
I seriously doubt the measures taken so far by the gahmen on property will dampen the enthusiasm for speculative or investment purchases. Higher interest rate and loan/collateral quantum reduced to 60pct or 70pct might.
ReplyDeleterex comments as follows,
ReplyDeleteSuch simple, anti-speculation measures are long, long overdue.
It should have been implemented 10 or even 20 years ago.
Election is coming so they have to catch up on all their Sins of the past. Panic button had been pressed; everyday the state media brings some truly positive and good news.
Do we forgive and give them another 5 year chance if they keep dishing out correct policies, even if at the eleventh hour?
i find it hard to decide.
rex
It is good that the Govt has acted to control speculation in the private residential market.
ReplyDeleteIt is diverting attention to the private residential market but action is also required to regulate the HDB market, particularly the HDB RE-SALE market.
in the eyes open big big environmemt, unfortunately only the smart one can take care of themselves
ReplyDeleteSelf regulation benefits the insurance companies and the agents.These companies will not do anything to affect their own business.
ReplyDeleteThe companies and the insurance agents work hand in glove to rob the consumers who are usually ignorant , clueless, gullible and trusting.
Does MAS care? I don't think so. If these people make more money it means more taxes for the govt.
Introducing similar measures like those in China, Australia, Malaysia could help ensure property prices is more reflective of domestic demand (though not necessary ensuring lower prices since domestic demand can still drive prices higher).
ReplyDelete1) In China, foreigners can drive up OFFICE prices for all they want. Govt is more interested in controlling residential prices by ensuring strict adherence to people living there or on work/study visa(but you can still see prices escalating because of domestic demand)
2) In Malaysia, you have govt imposing foreigners to take up homes that are valued more than RM500K (Probably ours should be moved up to $1.5mil).
3) In Australia, foriegn investors can only sell to foreign investors.
But the downside is once the measure is implemented, it will bring about a significant correction in property prices when investors pulled their fund out. So, this is a very drastic measure and I am unsure how China, Australia and Malaysia was able to implement it without crashing the market.
Although, I would think a similar measure rule for Singapore might be the forbiddence of anyone owning a private property to be holding a HDB (even after the 5yrs period)
On a side note, I did not mention Capital Gain Taxes as I do not believe it is an effective control on speculation as the base of investors is not reduced on the type of housing(like what china,australia,malaysia are doing).
Singapore govt policies are good if you are an investor, rich or large business owner. Otherwise you're just a factory worker --- to be utilised when orders and deals need to be fulfilled, discarded when business cycle slows down and costs need to be controlled.
ReplyDeleteIn the US, Obama is now proposing to have govt oversight of future increases in medical insurance premiums.
NY Times article
I believe that the most effective way to curb is to raise interest rates.
ReplyDeleteFor example,a HDB flat that rents for $2200 a month that cost $500000 yields 5.3%. Compare that with fix deposit at less than 1%.
Once the 'risk-free' interest rate is close enough to the rental yields minus interest repayments rates, you will see the herd moving the other way. That is my opinion
MAS should follow the Medical Council and Law Society to regulate the players in the financial industry. They really regulate to make sure their members don't bring the trade into disrepute but not MAS.
ReplyDeleteI find it interesting that our "public" housing which is meant to be affordable to the public is getting expensive and gahmen has to step in to prevent the bubble from bursting.
ReplyDelete