New measures help keep Singaporean dream alive

PropertyGuru
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A property is viewed as a necessity for Singaporeans. (Photo courtesy of PropertyGuru)

by Romesh Navaratnarajah (courtesy of PropertyGuru)

Reactions to the government's announcement of an additional 10 per cent stamp duty for foreigners buying private homes have been mixed, with most consumers welcoming it, while property insiders calling it harsh and unnecessary.

With private property price growth moderating to around three per cent since January's cooling measures and home sales dropping by about 20 percent between Q2 and Q3 2011, it's fair to ask whether these measures are necessary now.

Most people that I've spoken to welcome it as they see property as a necessity for all Singaporeans, just like job security. Many say that buyers have become greedy, using property as a speculative instrument. Certain individuals have even used foreigners as the bogeyman, saying cash rich overseas buyers have run prices up to unattainable levels.

While an additional 10 per cent tax hike might seem a lot for the average joe, the general consensus among many Singaporeans is that it shouldn't matter for wealthy buyers who will continue to snap up homes in the prime central districts.

Those in the industry are understandably upset. After all, they have a business to run that's based on profits and sales volumes. Property stalwarts such as Mohamed Ismail, CEO of PropNex, are predicting that transactions will dive by 40 per cent in the Core Central Region (CCR) and 20 per cent in the mass market segment.

Personally, I feel that while the earlier cooling measures, especially the harsh 16 per cent stamp duty has stamped out excessive speculation in the private property market and stabilised price increases, the high-end luxury market has been resistant to change. Case in point was the recent launch of Far East's newest project, The Scotts Tower (TST), with prices starting from S$1.94 million for a 624 sq ft one-bedroom SOHO apartment. The same amount could probably get you a two-to three-bedroom condo in the suburbs.

As a young Singaporean, I understand the goals and aspirations of other first-time buyers who wish to own a nice home — it's the capitalist dream and this latest ruling will keep or make such dreams a reality.

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