The Government had introduced the latest property cooling measure few days ago and is the 7th measure since 2009.
The intention is not to crash the property market but to stablise and normalise the current situation.
The governement approach is obvious:using needle to deflate the hot air ballon instead of shooting it down.
We are in a similar situation as America,the collapse of housing price is one of the main factor that triggered the Sub Prime crisis and in the first place no one will ever believe housing price in America will drop, just like in Singapore.No one will believe housing prices for Singapore will drop too.Many people believe when the interest rate start to rise,we can start to see correction in property prices,however i believe when the prices of the property start to decline and stop raising ,that will be the start of the nightmare.
When the property price start to decline, people will be force to sell thier property away because when the market price of the property drop below the outstanding loan amount, the banks will do a margin call, requesting you to top up cash as collateral.If you cant pay,the banks will seize the property.Coupled with huge supply of property,the falling price can be fast and furious.
This time the cooling measure had included industrial property,we refer to the chart and the price index for industrial property had spike up from 2009,whereas the remaining year from 2000 to 2009 the prices is relatively stable.Obviously speculation is at work,this concide with the Governement measure to curb housing property price since 2009 and forced investors & speculators to move into industrial segment.Please refer to property price index chart.
http://www.singstat.gov.sg/stats/charts/econ.html
I strongly support the government move in curbing the property price and in a greater context,this will benefit our whole economy as the destablising factor will be remove thus bringing stability to our economy.
