Although the Government's latest imposition of an additional 5 percentage points on the Additional Buyer's Stamp Duty for Singapore citizens and permanent residents who are buying their second residential property might have some short-term ripple effects by frustrating potential buyers' interest and plan to purchase a residential property, I think the long-term prospects of Singapore's property market are still optimistic and promising (Experts surprised by 'severity' of new property curbs, July 6; Redas says there's no basis for new cooling measures; 'A sledgehammer to kill a fly': Two major reasons behind move to rein in market 'euphoria'; Buyers snap up over 1,000 units at three projects in one night; all published on July 7).
In 2016, Singapore had approximately 217,300 millionaire residents. Thus, the demand for the residential and commercial property will continue to be strong.
The new private property cooling measures will prevent the occurrence of a housing bubble as well as strictly keep pace with our economic fundamentals.
United States President Trump's policy of protectionism and his persistent trade war with China, the European Union and Canada will impact Singapore's exports to the US, and subsequently proceed to weaken Singapore's economic performance and fundamentals.
Furthermore, the greenback might edge up if the US does not successfully negotiate a win-win trade dispute resolution with China and the EU. This might further affect the economy of US and its trade partners.
Also, Malaysia's economic outlook is still vague and unpredictable due to the recent change of government there.
The confidence of investors has yet to be tested due to the money-laundering scam at state-owned 1Malaysia Development Berhad.
In relation to this, some foreign investment and capital might temporarily drain out from Malaysia into Singapore's property market.
Hence, it is understandable that Minister for National Development Lawrence Wong said the Government was "very concerned that prices are running ahead of economic fundamentals".
Teo Kueh Liang
