Property prices

Forum: Cooling measures useful only if properly enforced

A man jogging along a park connector near Yishun Avenue 9  on Oct 23, 2020.
A man jogging along a park connector near Yishun Avenue 9 on Oct 23, 2020.PHOTO: ST FILE

I applaud Deputy Prime Minister Heng Swee Keat's recent speech to the Real Estate Developers' Association of Singapore (Property market must remain stable so young S'poreans can own homes: DPM, Jan 19).

As a young Singaporean with an aspiration of having my own home, I am cautiously awaiting the Government's next steps.

One of the main issues is the affordability of property for Singaporeans. Property cooling measures are useful only if properly enforced.

For years, developers and agents have run roughshod over the spirit of the cooling measures, with actions such as bulk buying unsold properties from one another to avoid qualifying certificate charges.

Another example of egregious action is the now-illegal practice of developers reissuing buyer's options to purchase a unit multiple times and how developers count such options as an actual sale to convince more buyers that there is demand.

Apart from better enforcement, the Government should consider bolder solutions such as imposing capital gain taxes on the sale of homes, strict limits on property ownership such as two properties per Singaporean and a maximum of one for foreigners, disallowing corporate bulk ownership and mandating that freehold prime land properties should be sold only to Singaporeans (this is practised by countries such as China).

At the heart of the matter is this deep-rooted belief that property prices will and should always rise. This is an unsafe belief for many reasons.

From an investment perspective, we often hear that there are no sure-win investments (be it equities or other types of investment).

Yet, somehow, this belief that you will never lose in a property purchase is prevalent in Singapore, perpetuated by the developers, agents and banks who have vested interests in such a belief holding sway.

From a social perspective, such a belief perpetuates a race to the bottom as to which properties can command the highest per square foot price or be the smallest possible shoebox units.

George Goh

A version of this article appeared in the print edition of The Straits Times on January 25, 2021, with the headline 'Cooling measures useful only if properly enforced'. Subscribe