Today’s papers reported that measures are rolled out with immediate effect to curb property speculation. In layman terms, they are:
(1) Sellers to pay stamp duty again if they resell the property within 3 years of purchase. (A $1m property attracts $24,600 of stamp duty.)
(2) For buyers who have outstanding loans with banks or HDB they
(a) need to pay at least 10% in cash for downpayment, instead of 5%.
(b) can only loan up to 70% of property valuation limits.
Looks like the government is intervening as the property market astronomical rise is going out of hand and they can only continue to roll out measures in a such manners to react accordingly.
I feel that more can be done to curb the property craze. It is a good thing that government is trying to balance speculative interest from real home seekers. However from my observation, most speculators are already sitting on high paper/real profits; the people who are trying to buy now are real home seekers.
That’s truly an irony.
Then again, what is the definition of speculator? If I am investing in property because I want to leverage on cheap interest rates and earn rental income for 10 years before selling off, am I a speculator?
Actually, I am only trying hard to save for retirement. With the stock market increasingly unpredictable, savings interest rates at 0.2%, buying a property seems to be the next best alternative for anyone who can cough up 20% downpayment.
Yet again, I am always priced out.
I applaud the government for proactively solving problems. But may I suggest that they stay on top of our problems by reacting before they even surface?
Prevention is better than cure, am I right, Mr. Govt?
6 comments:
The problem is that the Govt reacted too slowly in the first place to curb rising HDB resale prices; now these so-called "measures" came too little, too late. Even if the market is "cooled" for a bit, I doubt prices will "crash" as there is still low unemployment, low interest rates and healthy economic growth.
Much as I would like to see a sharp correction in both HDB resale and pte property market, I sadly think it will not happen soon.....unless the Govt gets more Draconian!
Regards,
Musicwhiz
I'm always curious why didn’t the govt act earlier when we people from the ground has felt it and have been voicing the problem.
Is it becuase of their inaction or is it because of internal red tape which slow down their response?
I agreed with what Musicwhiz said measures came too little too late.
so what now for the people who own a hdb flat but not yet 5 years, but have alredy purchased a property? so they got lucky?
It's always the case. Govt actions are usually reactive instead of proactive.
And because it is reactive, often, the intended result will be exacerbated. I expect a heavy correction in the property market in about 5 to 10 years time...
I guess property in nearby countries especially Johor may get a boost.
Be patient. I also waited for the market to slow down and bought my 1st property end of 2002. The good news is that economic cycles are getting shorter these days.
Government reaction is only a temporary fix. Economy and market sentiments often have higher impact (as what I pointed out in my blog).
property soul
http://propertysoul.com/
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