Proeprty Speculation by Individuals

Proeprty Speculation by Individuals

COLLIERS International has suggested that the authorities track multiple-unit purchases of private residential properties, which could be used to show the level of speculative activity.

Individuals who own several properties may dump them if the market softens and this exercise could potentially accelerate any property downfall, the property consultancy argued.

Colliers' director for research and consultancy Tay Huey Ying, said: 'So far, the government has been giving details on the number of subsale deals - which refer to secondary market transactions for projects that have yet to receive Certificate of Statutory Completion and are often seen as a proxy for speculative activity. That's useful information.

'But in addition to that, perhaps the government may also want to monitor and see the extent to which people are buying several units or even floors, particularly at new residential property launches, as that may also reflect an intent to speculate, that is, buying units with the aim of flipping them within a short period of time.'

When contacted, a spokeswoman for the Ministry of National Development said: 'The Urban Redevelopment Authority does not monitor multiple purchases by individuals. However, the government is monitoring the property market closely, to ensure that it remains healthy and sustainable.'

Ms Tay said she was more concerned with individuals who buy multiple units rather than than institutional investors like funds which make such purchases, since corporate buyers typically have greater financial muscle and are looking at holding their assets for rental income over a longer timeframe. 'Individuals are more likely to lack the financial muscle to hold on to their purchases if the market softens,' she said.

In addition to tracking those who buy multiple units or floors in the same development, Ms Tay also observed there were many individual investors who have been buying units across Singapore.

However, there was no mention of Major Funds who are investing in Singapore real estate as well as corporations buying into residential property also deserves monitoring, we at Exclusive Home feels.

Source - The Business Times