Time for cooling measures on medical properties?

I agree with the points raised by Dr Leong Choon Kit ("Increasing overheads also to blame for skyrocketing medical costs"; Dec 15).

Addressing the high and rising rents for clinics should be a top priority of policymakers.

The strong growth of healthcare real estate investment trusts and the medical suites market in recent years has made it easier for investors to purchase medical real estate.

Also, in recent years, property cooling measures have primarily targeted speculation in residential properties, not commercial developments such as medical real estate.

This has made it attractive for cash-rich investors to redirect their money towards medical suites, which delivered healthy yields.

This new money pushes up medical property values.

Property cooling measures have primarily targeted speculation in residential properties, not commercial developments such as medical real estate. This has made it attractive for cash-rich investors to redirect their money towards medical suites.

As supply fails to catch up with this surge in demand, landlords are able to increase rents.

This naturally puts pressure on doctors to raise their fees, which increases the burden on patients.

To fix this, the Government could consider extending property cooling measures to medical properties.

This could include further taxes targeting speculative behaviour.

Opening up the Singapore healthcare market to new entrants can improve supply and generate competition, and achieve our goal of being an international medical hub.

Reforms to our healthcare system may challenge the interests of various stakeholders but these changes will be necessary for the healthcare system to stay economically sustainable.

Lionel Loi Zhi Rui

A version of this article appeared in the print edition of The Straits Times on December 17, 2016, with the headline 'Time for cooling measures on medical properties?'. Print Edition | Subscribe