This is one of the occasion I support a Government's move.
The increase in property stamp fees is a good preventive against a possible influx of money overseas which will result in high inflation.
For new Singapore buyers, this is good news for them. For sellers, not that good. For the Real Estate Developers Association of Singapore, they were very disappointed with this increase stamp duties
Wrote Channel NewsAsia,
REDAS said the good take-up rate in the primary market is driven by the increased number of new launches and unique selling points of certain projects.
It is not indicative of a return to a speculative market.
REDAS believes given that the local economy is expected to slow down next year, the measures are untimely.REDAS must be suffering from short term memory lost. In the crisis of 2007 -2008, we saw the prices of property shoot up even when the Singapore slowed down.
The flux of today's economic problem is that there is too much money chasing for limited supply of goods which therefore drive prices up. REDAS, this is called inflation.
Money is being printed in the US and European countries like nobody business to pay off the interest for their sovereign debts alone.
Once the "investors" are paid off, they would need to invest their money somewhere and somehow. The bond market in Europe, which used to be considered safe, is a high risk market which they are looking to get out of. Interest rates are so low that they end up paying banks to keep their money.
So where is this flux of money going? If you have read the economic blogs, these flux of money is sitting in the shadow banking world of derivatives, buying and selling of contracts of commodities that has yet to bore fruit. That is why prices for basic commodities, like rice, sugar, floor, has been increasing.
But once the derivatives market becomes unprofitable, where would the money go? It is forecast that this supply of money is expected to be released next year. And they will most likely head towards the property market.
So even if the Singapore economy slows down next year, prices of property will still shoot up because there is just too much money sitting out there.
Of course REDAS is disappointed as this increase in property stamp duties means it would be harder to sell their buildings or properties.
A foreign buyer would have to think twice, no thrice, about buying a property. He/she must have the confidence that the property price here will increase by 20%-30% in five years time or more for him/her to sell and make money from this "investment".
Not highly possible with Singapore Government under voting pressure to make housing more affordable to Singaporeans.