Home prices moving the right way: Tharman

[reporter2]

http://www.straitstimes.com/premium/...arman-20130419

Home prices moving the right way: Tharman

Government has no plans for another round of cooling measures for now

Published on Apr 19, 2013

By Robin Chan


PROPERTY prices remain high but they are moving in the right direction, said Deputy Prime Minister Tharman Shanmugaratnam, adding that the Government has no plans for another round of cooling measures for now.

The Government is determined to lower the prices of homes relative to incomes, he added, but does not want to cause a crash in the short term.

"We're not planning another round of measures, but it depends on market conditions," said Mr Tharman, who is also Finance Minister and chairman of the Monetary Authority of Singapore (MAS).

"We're determined to achieve our objective of having prices come down relative to incomes. And that can be achieved both through income growth as well as some stabilisation or even cooling of prices, he said.

His comments came amid speculation that more cooling measures could follow the seventh and toughest round in January.

Mr Tharman was replying to a question on how the Government can manage inflation in a wide-ranging video interview with The Straits Times last week.

The question had picked up the third most number of votes from readers in an online poll on The Straits Times' current affairs website Singapolitics carried out over seven days. The videos are available at Singapolitics.sg

Mr Tharman, who also gave insights into the tax system, the economy and politics, and shared his vision of society in the future, said he believes "there is bound to be some softening in prices" as more new homes come into the market over the next two years.

But he did not completely shut the door to more measures.

The Government has a range of tools to stabilise the market, and can also tighten the criteria for banks giving loans, though it does not directly control the mortgage spreads, he said.

"Whether we do anything more on the MAS front, on the fiscal front, or on supply measures depends on market conditions. We don't rule out any measure," he said.

The Government has rolled out seven rounds of measures to bring under control a rising property market fuelled by a long period of extraordinarily low interest rates and pent-up demand.

It has also delinked the prices of Build-To-Order flats from the resale market, and rolled out 70,000 new flats since 2011.

Mr Tharman's comments will temper speculation that an eighth round of measures is already in the works.

New private home sales surged to an all-time high last month, though analysts believe the momentum will not continue as the tough measures kick in.

Mr Donald Han, special adviser at HSR Property Consultants, said: "This will help reassure the market that the Government is working to find a level of sustainable prices in the long term, but will not bring it down with a sledgehammer."

In the longer term, Mr Tharman said, he favours a more steady growth of property prices and the ratio of prices to incomes being "somewhat lower" for "the average family... including those who are in the upper middle income group and go for private condominiums".

The Government has not decided what level it wants to reduce that ratio to, however, and the change will be through an "evolution" rather than any sharp correction.

Speaking more broadly about inflation concerns, DPM Tharman said that excluding housing and cars, "regular inflation" - costs for basic items, education and health-care needs - is "getting under control".

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[kane]

Since prices look like they are levelling and if we are heading in the right direction, it means income is looking up in the forseeable future. That is good news then.

[TravieJackie]

To calm panic buying?

[teddybear]

If Tharman increases GST further and continue his current policies to increase his so-called comsumption tax and tax on wealth by increasing property tax instead of taxing income and estate duty! Would any middle/upper middle income man with little intelligent level but at least higher than the minority know that they being are sort-changed? Would they vote against Tharman in the coming GE? Hmmmm

[radha08]

up to them to say what they wantwe just listen

[phantom_opera]

b4 that agents will say quickly buy CM coming

now agent will say quickly buy garmen say price is right

oh ya keppel land elated

[teddybear]

The cost of living is going to inch up further if they continue to increase the rental of the industrial/commercial lease.

b4 that agents will say quickly buy CM coming

now agent will say quickly buy garmen say price is right

oh ya keppel land elated

[kane]

b4 that agents will say quickly buy CM coming

now agent will say quickly buy garmen say price is right

oh ya keppel land elated

anyhow also the agent can spin it in a positive light. lol.

[phantom_opera]

The cost of living is going to inch up further if they continue to increase the rental of the industrial/commercial lease.

McDonald just up prices

[kane]

McDonald just up prices

go for their $2 deals.

[thomastansb]

Must see who is Tharman going to face lah. I cannot vote for an idiot because Tharman increase GST to 8% right?

If Tharman increases GST further and continue his current policies to increase his so-called comsumption tax and tax on wealth by increasing property tax instead of taxing income and estate duty! Would any middle/upper middle income man with little intelligent level but at least higher than the minority know that they being are sort-changed? Would they vote against Tharman in the coming GE? Hmmmm

[phantom_opera]

we are behind china by 2y so capital gain tax will come 1y to 2y later

prepare fir divorce lol, inflation so high still Inc GST is suicide

[teddybear]

I believe many, me included, will vote for that idiot as long as he is not Tharman because at least that idiot did not do these wrong things about taxes....

Must see who is Tharman going to face lah. I cannot vote for an idiot because Tharman increase GST to 8% right?

[princess_morbucks]

So I guess Deutschebank did not predict correctly.

http://sbr.com.sg/economy/news/more-...-deutsche-bank
See their article on 12 April 2013 :

More property cooling measures incoming: Deutsche Bank

Singapore badly wants to subdue inflation.

A new Deutsche Bank report explains that the Singapore government, keen on keeping inflation under control, will be eyeing even more property cooling measures, in conjunction with an unchanged monetary policy. But the bank signalled doubt at the impact of these measures because Singapore is still swayed heavily by macroeconomic winds in spite of forceful domestic policy efforts.

Here's more from Deustche Bank:

Singapore’s growth depends largely on external demand, which has been weak for a while, affecting exports and production, but the economy’s fundamentals remain strong, thanks to low interest rates supporting thriving domestic demand. If anything, some slowdown in growth is desirable as that could relieve some cost pressure on the economy.

With this backdrop, we don’t expect the authorities to have much desire to support the economy. Interestingly, the thrust of policy measures lately has been in the opposite direction, with the Monetary Authority of Singapore (MAS) steepening the slope on the nominal effective exchange rate (NEER) appreciation last year and a series of macro prudential measures being put in place since 2010 to cool the property market.

As long as interest rates remain at their floor and global liquidity abundant, there will be only limited traction from steps to cool the property market. As cost of financing remains cheap, money will find its way to the property market and associated activities.

The curious characteristic of the Singaporean economy is that it is compelled to maintain a policy of exchange rate appreciation to fight tradable price inflation, which in turn brings in flows and keeps rates low, and consequently fuels non-tradable inflation (e.g. rent and transportation).

The authorities have taken an array of measures to stem the latter, but the impact has been limited so far. We think the MAS will likely maintain an unchanged stance during its policy review later this month (as it would not want to cause a rise in inflation expectations through the tradable channel when non-tradable inflation is so high), and more property cooling measures could well be in the pipeline. But we are not convinced if this policy mix will bring about the desired result. Like it or not, Singapore’s fortunes will continue to remain tied to the vagaries of global macro-economy and developed country monetary policy for years to come.

[timmy]

we are behind china by 2y so capital gain tax will come 1y to 2y later

prepare fir divorce lol, inflation so high still Inc GST is suicide

Isn't the absd, ssd more potent than capital gain tax? Make money or not u still have to pay. I would argue we are ahead of china in this aspect.

[phantom_opera]

Isn't the absd, ssd more potent than capital gain tax? Make money or not u still have to pay. I would argue we are ahead of china in this aspect.

not really, SSD is over in 4y (and reducing each year), capital gain tax will be in force until they say remove

[thomastansb]

It depends. I don't see him doing anything wrong. He has been great in fact. But different people, different views. Some people don't like GST 7%, some see GST as helping the poor by channeling the wealth. Some gain, some don't so too bad..

I believe many, me included, will vote for that idiot as long as he is not Tharman because at least that idiot did not do these wrong things about taxes....

[teddybear]

I'm a very open people! Can you describe in detail how GST helps the poor by channeling the wealth by providing supporting number?

No point of giving the LIP-service as we are clever people and have intelligent level to comprehend and analyze. The floor is yours to convince us here!

You have other posting in other thread, I shall reply you tomorrow as I'm sleepy now....

It depends. I don't see him doing anything wrong. He has been great in fact. But different people, different views. Some people don't like GST 7%, some see GST as helping the poor by channeling the wealth. Some gain, some don't so too bad..

[lajia]

So u rather they go straight to increase your income tax? For those poor, do they go shopping in supermarket or eat in restaurant as often as u do or they do marketing in wet market and eat at home for instance? Do they have more chance to escape GST more likely?
Maybe also wrong to say that the rich would spend more and will pay more of such consumption tax...
Tax is inevitable! Ppl so happy about the free MRT trip, the low BTO price, so happy about MRT going to built at their doorstep and so happy about govt spending money to suit their lifestyle....all this money come from where??

There are many kinds of tax system and there are pros and cons...I'm not saying they are doing the right thing if they increase the GST but spare a thought....

I'm not trying to convince u as I see no point in doing that but just offering my views...

I'm a very open people! Can you describe in detail how GST helps the poor by channeling the wealth by providing supporting number?

No point of giving the LIP-service as we are clever people and have intelligent level to comprehend and analyze. The floor is yours to convince us here!

You have other posting in other thread, I shall reply you tomorrow as I'm sleepy now....

[teddybear]

I think you are missing the trees.

1. Firstly, GST is unfair as it taxes everybody, including new borns, children, retirees, sick, disabled etc. they earn nothing why do they need to pay tax? Everything you buy, including everything from wet market & supermarket, attracts GST. You have confused GST with UK's VAT. VAT does not tax basic necessities, but GST do. In my opinion, GST 7% is equivalent to 50% VAT for middle income families!

2. If GST is implemented to collect more revenue, why are the top earners given income tax cuts? Isn't this giving people the impression that they impose additional tax on all other people in order to cut the tax of top earners (of which the policy makers are included in this category)?

3. Now they are talking of more tax on wealth, but same problem as 1 again, it affect the masses while the top earners still pay less taxes because of (2). As far as we can see, this tax is to collect more taxes from general population since the real tax on wealth for the rich, estate duty, has been abolished! Again, we know know who benefited right?

So u rather they go straight to increase your income tax? For those poor, do they go shopping in supermarket or eat in restaurant as often as u do or they do marketing in wet market and eat at home for instance? Do they have more chance to escape GST more likely?
Maybe also wrong to say that the rich would spend more and will pay more of such consumption tax...
Tax is inevitable! Ppl so happy about the free MRT trip, the low BTO price, so happy about MRT going to built at their doorstep and so happy about govt spending money to suit their lifestyle....all this money come from where??

There are many kinds of tax system and there are pros and cons...I'm not saying they are doing the right thing if they increase the GST but spare a thought....

I'm not trying to convince u as I see no point in doing that but just offering my views...

[chestnut]

Brudder teddy, Your points are very valid... The additional taxes are the mega rich who move from Aus/USA/India, etc.... You know who rite... This people will now need to incur taxes here when they set up offices. If this people don't set up shop here, no income for govt. now they set up here, additional income to govt that never was here.

Why did we lower income tax. Look at Hong Kong tax system...

The rich will always find ways to 'siam' tax

I think you are missing the trees.

1. Firstly, GST is unfair as it taxes everybody, including new borns, children, retirees, sick, disabled etc. they earn nothing why do they need to pay tax? Everything you buy, including everything from wet market & supermarket, attracts GST. You have confused GST with UK's VAT. VAT does not tax basic necessities, but GST do. In my opinion, GST 7% is equivalent to 50% VAT for middle income families!

2. If GST is implemented to collect more revenue, why are the top earners given income tax cuts? Isn't this giving people the impression that they impose additional tax on all other people in order to cut the tax of top earners (of which the policy makers are included in this category)?

3. Now they are talking of more tax on wealth, but same problem as 1 again, it affect the masses while the top earners still pay less taxes because of (2). As far as we can see, this tax is to collect more taxes from general population since the real tax on wealth for the rich, estate duty, has been abolished! Again, we know know who benefited right?

[teddybear]

So it is the job of the govt to close the loophole which these rich are using to avoid tax!
So you saying gov taking easy way to raise more taxes from general population instead since they have no way to Siam tax?

Yes, look at HK system, they have NO GST despite having max 15% income tax!
Sg govt not so capable why get pay >5x of HK govt hah?

Brudder teddy, Your points are very valid... The additional taxes are the mega rich who move from Aus/USA/India, etc.... You know who rite... This people will now need to incur taxes here when they set up offices. If this people don't set up shop here, no income for govt. now they set up here, additional income to govt that never was here.

Why did we lower income tax. Look at Hong Kong tax system...

The rich will always find ways to 'siam' tax

[thomastansb]

Top earners get income tax cuts? Who? Maybe you can enlighten me.

GST is fair because everyone get taxed but the poor get back more GST rebates, electrical rebates, workfare and many more. If you take away 7% GST, you take away all the rebates, all the workfare and all subsidies and all financial assistance. Someone earning 1k a month (my auntie) will pay at most $70 a month in GST or $840 a year. She gets back more than 8 times the amount every year. Of course, if you do away with the GST, everyone benefit including the rich. I benefit as well. You benefit as well. But the poor will suffer.

I think you are missing the trees.

1. Firstly, GST is unfair as it taxes everybody, including new borns, children, retirees, sick, disabled etc. they earn nothing why do they need to pay tax? Everything you buy, including everything from wet market & supermarket, attracts GST. You have confused GST with UK's VAT. VAT does not tax basic necessities, but GST do. In my opinion, GST 7% is equivalent to 50% VAT for middle income families!

2. If GST is implemented to collect more revenue, why are the top earners given income tax cuts? Isn't this giving people the impression that they impose additional tax on all other people in order to cut the tax of top earners (of which the policy makers are included in this category)?

3. Now they are talking of more tax on wealth, but same problem as 1 again, it affect the masses while the top earners still pay less taxes because of (2). As far as we can see, this tax is to collect more taxes from general population since the real tax on wealth for the rich, estate duty, has been abolished! Again, we know know who benefited right?

[thomastansb]

You can't compare like this. You can't take an apple and compare. You have to take the whole basket and compare. That is why no need compare other countries.

HK has no 90 sqm 4 bedroom HDB at 250k. Maybe 200k with grants and subsidy. And don't even talk about subsidised housing in HK . Sorry, cage I mean... So you want their "cage" standard?

I forgot, Singaporeans want the salary of danish, air of swiss, working hours of Greece and lastly, cost of living of Zimbabwe. Buy HDB at 20k, want to sell at 1M.

So it is the job of the govt to close the loophole which these rich are using to avoid tax!
So you saying gov taking easy way to raise more taxes from general population instead since they have no way to Siam tax?

Yes, look at HK system, they have NO GST despite having max 15% income tax!
Sg govt not so capable why get pay >5x of HK govt hah?

[danguard]

You can't compare like this. You can't take an apple and compare. You have to take the whole basket and compare. That is why no need compare other countries.

HK has no 90 sqm 4 bedroom HDB at 250k. Maybe 200k with grants and subsidy. And don't even talk about subsidised housing in HK . Sorry, cage I mean... So you want their "cage" standard?

I forgot, Singaporeans want the salary of danish, air of swiss, working hours of Greece and lastly, cost of living of Zimbabwe. Buy HDB at 20k, want to sell at 1M.

hard truths man ... some singapore colleagues i come across actually perfect fit espectially the Africa standard of living and Swiss profits when they want to sell their property... wait a min ... this fits bro MTB ...

[teddybear]

1. You don't even know this fact? If so, you are really ignorant indeed! Since you are so ignorant, what basis are you arguing as though you are wise & knowledgeable?

2. Typical excuses of MIW. Since they are not increasing GST for past few years, so no longer willing to help the poor anymore?
may be you can tell us how cutting the tax of tax earners by 5% & abolishing estate duty & then implement GST help the majority of middle-income earners, those making up of almost 90% of the population?

1. Top earners get income tax cuts? Who? Maybe you can enlighten me.

2. GST is fair because everyone get taxed but the poor get back more GST rebates, electrical rebates, workfare and many more. If you take away 7% GST, you take away all the rebates, all the workfare and all subsidies and all financial assistance. Someone earning 1k a month (my auntie) will pay at most $70 a month in GST or $840 a year. She gets back more than 8 times the amount every year. Of course, if you do away with the GST, everyone benefit including the rich. I benefit as well. You benefit as well. But the poor will suffer.

[thomastansb]

You still haven't answer me. How did the rich income taxes get cut? Still waiting for a reply.

1. You don't even know this fact? If so, you are really ignorant indeed! Since you are so ignorant, what basis are you arguing as though you are wise & knowledgeable?

2. Typical excuses of MIW. Since they are not increasing GST for past few years, so no longer willing to help the poor anymore?
may be you can tell us how cutting the tax of tax earners by 5% & abolishing estate duty & then implement GST help the majority of middle-income earners, those making up of almost 90% of the population?

[teddybear]

Please go google to find out. If you don't even know this fact and can't even bother to find out the facts, what facts are you using to argue on this issue?
People like you would just argue without any facts and basis to back up your argument?! It just shows how hollow you are. As the saying goes, empty vessels make the loudest noise. It is rather true when applied to you.

Please check the fact and come back again to argue why the top earners income tax were being cut by 5% such that GST needs to be implemented!

You still haven't answer me. How did the rich income taxes get cut? Still waiting for a reply.

[thomastansb]

Show me the proof... Don't talk so much...

Please go google to find out. If you don't even know this fact and can't even bother to find out the facts, what facts are you using to argue on this issue?
People like you would just argue without any facts and basis to back up your argument?! It just shows how hollow you are. As the saying goes, empty vessels make the loudest noise. It is rather true when applied to you.

Please check the fact and come back again to argue why the top earners income tax were being cut by 5% such that GST needs to be implemented!

[teddybear]

After so long, still can't find my example! REAL MORON!

Show me the proof... Don't talk so much...