Govt will do what is necessary, says Mah. Such steps could include upping loan-to-value ratio or levying a speculation tax, say analysts.
WHILE the current exuberance in the property market has “some element of speculation involved”, it is not excessive. And if does get to that point, the Government ” will take whatever action is necessary” to prevent excessive speculation, said National Development Minister Mah Bow Tan (picture) yesterday. He was speaking on the sidelines of a ceremony marking a construction phase of Tower 1 at the Marina Bay Financial Centre (Phase 1).
Analysts told Today that if the Government decides to take any action, it could be anything from increasing home loan-to-value ratio to introducing a tax specific to property speculation. Industry veteran Nicholas Mak noted that during the 1996 property boom, property sellers were taxed on one-third to 100 per cent of net gain.
Cushman and Wakefield Singapore managing director Donald Han said that making buyers pay stamp duty upon the signing of Sales and Purchase Agreement would deter speculative sub-sales.
Other possible measures include increasing the upfront cash component in a sale and banning interest absorption schemes.
Mr Han said that rather than implementing anti-speculation measures, the Government is more likely to ease supply concerns by moving selected land parcels from the Reserve List to the Confirmed List of the Government Land Sales Programme, even though the Confirmed List is suspended for the second half of this year. He thinks this could happen in the next three months, if the property market continues to remain buoyant.
For now, Mr Mah is urging caution and prudence. “Do your sums, buy property which is within your means.” The minister added that it is unclear if the current demand is sustainable: “I’m not so sure whether the demand is due to pent-up demand or whether it is due to buyers responding to lower prices by the developers or even due to the low interest rates.
“If you look at market fundamentals today, you will see that there is still uncertainty.”
Source : Today – 30 Jul 2009
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