Thursday, May 16, 2019

Distortion in residential property market

The govt offers a grant for a citizen to buy a new or resale HDB flat. This grant is very attractive, as the buyer can realize it when he sells the flat after 5 years.

There is no such subsidy when the family rents a flat.

Furthermore, the high contribution rate forces citizens to buy a HDB flat, because they cannot use the contribution to pay the rental.

This distorts the market. It forces people to buy a HDB flat or property when it is more sensible for them to rent a flat. It is a reason for the price of property to go up so high. It distorts the market.

High property prices is bad for the long term health of the economy or the living standard of the people.

This policy has to be changed. Vote here 

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