Now, residential property investors (or speculators) need to pay additional buyer's stamp duty, ranging from 3% to 10% (for foreigners and corporations). REDAS chief (Wong) lamented that it will put downward pressure on property prices (I agree) and even the wider economy (question mark).
Inflation
Novermber's inflation rate was 5.7%. It looks bad for the government. It shows that government eefort to rein in inflation is not working. One of the factors affecting inflation is property prices. The govt has to rein in property prices to tame the inflation.
Investment
One comment is that it will drive away investors in the property sector. How does anyone benefit from foreign investors in residential properties? Yes, the developer's benefit. The construction companies benefit. There is business activities, but how does Singapore benefit? The government benefits by collecting stamp duty, and being able to sell land at higher prices. Once property price go up, the foreigners will sell off, making a tidy profit.
HDB
From a macro point of view, we should not forget that the govt has announced that they will ramp up the building of HDB flats. If they don't slow down the private property sector, prices of raw material and labour will escalate with competing demand. HDB prices have to be raised to break even, or make a decent profit.
So, actually, the move is timely.
