Recently developers have been sounding out to the government that the recent cooling measures are going to hurt an already frail economy and could spark a downward spiral for property prices. There has also been speculation that the government would remove these measures if property prices were to correct too much or if the economy were to contract drastically. To me, I feel that these measures should and would stay.
This is not about economics anymore. From day one, property prices were determined by political factors more than economic ones. Then minister for national development, Mah Bow Tan, embarked on his "asset appreciation" policy and wanted public housing to be seen as an asset which would appreciate over time. It did not matter that prices escalated out of control and beyond the reach of people. If economics played a part, the cooling measures should have been implemented from the onset of the bubble in 2009. Nothing was done and minister Mah allowed property prices to appreciate in a dramatic fashion after the financial crisis in 2008.
Next up was the use of social media. Politics in social media was liberalised. Singaporeans could discuss about politics and political groups could use sites such as Facebook and Twitter to spread their propaganda. Out came the opposition and they highlighted the problem of housing to all Singaporeans, young and old. It caused a great awakening and people realised that this spike in prices could not go on forever. Housing was one of the core topics in the general election of 2010.
Finally, the last straw to the PAP was the loss of a great comrade Mr George Yeo. Not only was he an able foreign minister, he was, to me, a possible candidate to take over as Prime Minister when Mr Lee Hsien Loong were to step down. This shocked the PAP and they had to do something. They realised that the past years were filled with mistakes in policies and that the unhappiness on the ground was spreading. Old guards like Lee Kuan Yew, Goh Chok Tong, Wong Kan Seng and Mah Bow Tan stepped down from the cabinet and finally our PM Lee Hsien Loong could assemble a cabinet which he could truly call his own. The PAP is now more consultative than authoritative.
Thus I would politely remind an association like REDAS that property prices have their ups and downs. Just because the government is trying to cool it down does not mean that you can throw economic rationale to the measures implemented. If REDAS truly cared about economics, why didn't developers feel that something was weird with our property market when they were making obscene amounts of money the past few years?
Typical upper elite class behavior. Only make noise when things don't go their way. They seem to forget that they had it very good for the last few years.
Yours Sincerely,
Daryl Lum
(+65) 9009 8731
visit my website @ www.DarylLum.com
read my blog @ www.DarylLum.blogspot.com
