Property cooling measures – any more to come?

Wait, it’s Friday again. Will the government announce any new measures today to cool the property market?

More than once, Friday has being picked for reporting such ‘exciting’ news. New policies mentioned today are likely to be made effective tomorrow, before everyone have a ‘nice’ weekend.

For many who have a stake in the industry – be it the developers, agents, buyers or owners – Friday can suddenly change their happy heartbeats to making their heart skip a beat.

In fact, it’s not just Friday. If you revisit previous announcements, both Monday and Thursday have been chosen before.

To tackle the overheated property market, the Singapore government has introduced five rounds of new property policies in three years’ time.

Has the government done their job? Yes.

Are they doing enough? Maybe.

Do they prove to be effective? I don’t think so.

Every time after the new measures come out, the property market will be quiet for a while to absorb the news. Before long, buyers and sellers will continue their activities just as before.

Buyers are undeterred. Prices are climbing. We still do not see any drastic drop in sales volumes or transaction prices.

Singapore is not alone. To act against speculation in properties, Asian governments, including the ones in China, Hong Kong and Taiwan, are introducing similar policies to control the local property market.

You can see similar patterns in nearly all of them – market slows down for a while before it picks up again.

So whose reaction do you think determines the market direction, the governments’ or the buyers’?

When you look closer, governments in these Asian countries are actually playing a balancing act. They are juggling between attracting hot money and containing a bubble, and between sustainable economic growth and stabilized property prices.

Cooling measures is a means to address the grievances and soothe the discontent of the general public, or for the ruling party to win enough votes in the next election. It has never meant to be a long-term solution.

After all, no government wants to see their country having reversal of fortune amid a booming property market. They also have an interest in attracting foreign investment through property purchase, helping country reserves by selling more plots of land, and collecting revenue from taxes and duties under different names from buyers and developers.

Buyers will still continue to shop as soon as the market sentiments are positive. Cooling measures is only an obstacle that they can find ways to overcome.

As for the governments in those Asian countries popular with cash-rich investors, they will continue to sell new plots of land, pocket revenue from property-related activities, while getting more rounds of cooling measures down the road.

It’s not surprising to see more cooling measures on its way. Friday or not, it’s just like any other day.