Could property cooling system measures be long-term?

Unless residential property prices drop dramatically, the cooling measures may not be lifted by the authorities, reported Singapore Business Review mentioning a Maybank Kim Eng report.

“Singapore families have $840 billion of capital, or residential property was tied up in by 209 percent of GDP. Another clear consequence of property ‘overinvestment’ is that house price appreciation fuels wage inflation ” the report said.

Residential properties stay a popular investment group, with investors setting aside the majority of their economies in the expectation they can purchase a house once costs finally fall while income yields have been meagre recently.

We consider that residential properties are sucking in excess capital, with an increasing variety of Singaporeans purchasing their second and third properties. This is nonproductive.” And when the new launches like Lake Grande is launching soon, it will means more Singaporeans would be keen in the 2nd or 3rd properties.

Maybank considers the market will be better off if this dead capital is used by Singaporeans elsewhere, including fostering entrepreneurship and enhancing consumer spending.

“To ensure Singapore’s long term survival, we consider the authorities shouldn’t remove (the) property cooling measures. A gradual and continual easing of property costs is needed to restore company competitiveness, in our perspective.