Letter: Government property cooling measures are not effective on price hikes caused by foreign speculators

by A concerned Singaporean 
In July 2018, in order to cool down the hot property market then and to slow down the steep property price rises, the government implemented some property cooling measures which included higher stamp duties and/or  additional buyer stamp duty (ABSD)
For Singapore citizens, the additional buyer stamp duty (ABSD) of 12% on second property and escalated 15% on third property have definitely deterred or slowed down the purchase of second or third property since Singapore citizens are mostly salaried employees with limited purchasing power, no to mention the darkening economic outlook and the uncertain employment market.
However, the 20% ABSD (although higher than local buyers) imposed on the foreigners (especially the rich China people in the millions) would hardly deter them. Unlike the majority of Singapore citizens, these foreign buyers are mostly not salaried employees or working class.  They have much higher purchasing power than the majority of Singapore citizens.
Unlike Singapore citizens, foreigners can buy second, third or even 10th property at the same ABSD rate (20%) as their first property ie without incremental stamp duty. With a flat ABSD,  it would also not deter foreigners from buying the second, third or even 10th property.
Why are local citizens being penalised with escalating ABSD for buying an additional property but not the foreigners?
No wonder property prices continue to rise despite the cooling measures because the foreign buyers’ investment decision is not affected by the higher but flat ABSD.
With the situation in Hong Kong, we all know and expect that more Chinese and Hongkongers would shift or have already shifted their property investments to Singapore. Logically prices should continue to go up, and it did.
Therefore, it is logical to deduce that foreigners are the ones pushing up the local property price increases.
Based on past statistics, cooling measures (except  TDSR:  total debt servicing ratio) implemented by the government have not reduced property prices. It at most kept the prices increase at a slower rate. Property prices have in fact increased significantly over the last few years despite the various cooling measures.
The cooling measures so far have again proven to be ineffective with the recent frenzy pushing up the prices due mainly to foreign buyers investment trend. It is high time the government implement new and more effective cooling measures.
While higher stamp duty or ABSD for second third property have been effective on local buyers, by increasing the ABSD for first investment and implementing incremental ABSD for subsequent additional property purchases on foreign buyers would not be as effective due to their high investment appetite and purchasing power.
For the foreign buyers, other forms of measures would be needed to arrest the spike in the already high property prices, otherwise private property owners in Singapore would ultimately and mostly be foreigners or rich Singapore businessmen or property developers and remain unaffordable and out of reach for many local citizens.
Besides increasing stamp duties and ABSD,  other more effective measures targetting at the main culprits ie the foreign buyers could include the following:
1) Foreigners and PRs can only buy properties which are priced above $3 million. This will prevent foreigners/PRs entering the lower /mass market segment (which majority salaried Singapore citizens would enter) and pushing up the prices there.
I would include PRs because these are basically foreigners who can quite easily get PR status in Singapore.
2) Foreigners and PRs must take loans from banks to buy properties.  This would not only boost the Singapore banking business, but the bank can also conduct a more thorough AML (anti-money laundering) screening on the foreigners.
3) To impose a non-occupancy tax on unoccupied or untenanted property to prevent property speculation;  this can also increase government tax revenue.
4) Any resale by the foreign owners/PRs can only be made to Singapore citizens.
I hope our government will seriously consider the above measures so that owning private property will not become an unattainable aspiration of Singaporeans due to the huge influx of foreigners!