What is needed are forward looking measures which the government failed to think through when the Singapore grew from a regional city to a global-polis. Quietly they have forgotten to revisit policy assumptions which are no longer true. As a result our real estate begin to approach the levels of global cities.
Planners could take a page from the way good central bankers operate by leading instead of reacting to the market. You could begin by declaring what you like to see, which must be a band of outcomes and what you would not tolerate. The market would usually self regulate because it doesn't want to invite the stick coming down on them. The cost to policy makers are just deep thinking and words. How much cheaper and effective can it get?
I believe HDB flat prices are highly correlated with private property prices. Hence, if private property prices continue to climb, so will HDB flat prices. Spore private property sector is seen as just another investment opportunity by global investors. If these investors see it as a good bet, they will continue to invest in it. This is happening right now and will likely to continue into the foreseeable future.
ReplyDeleteGiven the land scarcity in Singapore, demand will always outstrip supply if this is not checked by some effective regulatory measures. One possible solution is for the govt to impose quotas on foreign investors (non PRs) owning private properties (eg - all condo/private apartments are restricted to a maximum of 10% foreign ownership). Having quotas will likely be more effective in curbing the demand side of the equation compared to the current capital gain tax measures.