I read with interest a post on the Temasek Review about property prices. Although I am not going to be making political statements about property and how it is linked to our ruling PAP party, I see it as 2 separate issues and it should not be politicized. During this CNY period, conversation inadvertently drifts to the economy, inflation, property prices and the recent cooling measures, considering that several family members are long term property investors and several other family members are also ERA real estate professionals.
Everyone has their opinion about why we are in this state. Relatives that have yet to buy their HDB are whining about the high Cash over Valuation for secondary market units for sale, new units take too long, or are too far from parents, and why valuations are so high.
In the secondary market it is the market that decides the transacted price of the property. If due to demand and supply, lack of supply, but high level of demand (like COE prices), will result in higher COV. Eventually the higher COV, and higher transacted prices eventually affects the overall valuation.
I see it that there isn’t much that can be done to affect the secondary market, as long as there are willing sellers and willing buyers, it may continue to push COV and valuations higher. Intervention by the form of the earlier cooling measures requiring private property owners to sell off their private property before buying HDB, will force these individuals who have additional funds to “invest” in the HDB market. This however has a wider impact, it has similarly reduced the number of HDB units placed on sale in the secondary market, hence I think that this cooling meausre’s impact is limited as a result.
What some comments at our CNY gatherings is that even new HDB flats do not seem to be very “Subsidized” given that they are equally pricey, and out of reach of some new couples. If our government is concerned about procreation, shouldn’t there be further subsidies given to new couples? This may induce them to procreate, and the lack of child care amenities and parents nearby to help with caring for the baby is also a “reason” or perhaps excuse why some are delaying their duties (filial and nationalistic ones).
But I guess there should be less finger pointing and focus should be on the solution, so regardless the political situation or if (or if not) the coming election, this is a perennial issue, and part of the growing pains of a growing country, that we should pay attention to.