Hongkong and China coming down hard on property speculation
Hongkong has announced more stringent measures to curb property speculations amid warnings by the IMF that the property bubble could burst. Sales of properties within 6 months of purchase will not have to pay 15% of stamp duty. Down payment for properties above S$2m has been raised from 40% to 50%. This irrational fear of property bubble is spreading from South Korea, China to Brazil. The control measures would mean that property prices in these countries will not go up anymore. Now that is bad. In Singapore, property prices can only go one way, up and up. And this is good. It must be. And we have no property bubble to fear. Our properties are all priced to be affordable. This is the ingenious trick that all the other countries failed to learn. The affordability formula is as stretchable as rubber. Even if our HDB 3 rm flats are priced at $1m each, they will still be affordable. From two income households servicing the mortgage for 30 years, this can be made even more attractive by having 4 incomes to pay for it. There is further flexibility to increase the repayment period from 30 years to 60 years too. If these countries would be humble enough to learn from us, they will not need to panic and impose all kinds of anti speculation measures. And they will be cheering everyday for property prices to go up, the higher the better.