November 23, 2009 by admin
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Written by Our Correspondent
Acting Minister for Information, Communication and Arts
Rear-Admiral Lui Tuck Yew said that the property tax of HDB flats
is being raised next year partly to avoid having to introduce a
bigger increase later should home prices continue to rise.
He said:
“The problem is, the longer you defer it, the larger the
increase will be…if HDB prices continue to go up.”
The property tax rate is 10 per cent of a property’s annual
value which has increased with rising property prices.
HDB resale prices have risen a hefty 31.2per cent in the past
two years and hit a record high in June this year.
The sky-rocketing prices are attributed partly to cash-rich PRs
entering the resale market.
According to real estate agency ERA, 40 per cent of the buyers
of resale flats are PRs.
An Indonesian PR forked out a record $653,000 for a 4-room HDB
flat in Queenstown lately while he could well afford a
similar-sized condominium in the suburbs.
Mr Lui also repeated the official view that Singaporeans will
stand to gain from the rising value of their HDB flats.
“If they eventually need to sell…(it) releases more money
for their old age,” he said.
However, Mr Lui did not elaborate further on where the
homeowners will stay if they sell their flats in such an
inflationary market. They will probably have to fork out more to
buy another flat.
More than 85 per cent of the population live in public housing
built by the government agency HDB. However, these are 99-year old
leasehold flats whose sale and resale are subjected to a variety of
conditions such as a minimum 5 year occupation period.
Government leaders and HDB officials have insisted that the
rising prices of flats helps to “create wealth” for
Singaporeans.
This prevailing misconception has been debunked by a research
done by two NUS professors NUS professors Abeysinghe and Gu Jiaying
showed clearly that “higher property prices, instead of creating a
wealth effect, exert a significant and negative “price effect” on
consumption expenditures leading to a fall in the average
propensity to consume.” (read article
here)
As house prices go up, the increase in the value of housing
assets is accompanied by a concurrent rise in the financial
liabilities of households, in the form of higher downpayments for
purchase of residential properties and burgeoning housing
loans.
Source: The Temasek Review
ERP, this month also went up what.
What to do, most Singaporean vote for them.
