Property frenzy may be caused by baseless sentiment

Letter from Steve Ngo

I refer to the letter, “A lesson worth remembering” (May 7) by Mr Lim Boon Hee, and I absolutely agree with his views. In particular, I fully support his belief that “with the kind of salaries that average Singaporeans earn, such prices are not sustainable”.

The economy may be doing well, but that is not filtered down to all sectors, and does not translate to every Singaporean being prosperous.

All the bullishness is just sentiment. If we are shopping according to our sentiments, then why are people risking hundreds of thousands — beyond what they can afford — to “invest” in properties? It’s somewhat of a dream if anyone thinks that they can depend on rental yield to pay for their mortgage.

It appears that the property market’s bull run is artificial but this is not surprising.

A few years ago, I viewed a suburban condominium and the sales person told me that there were only few units left. Recently, it was advertised that they still have quite a number of choice units left.

I don’t know exactly how the property business works but I certainly would not be surprised if the developers themselves “buy” the properties — hence creating the impression that there are no more units left — and put the units up for sale again later.

We cannot expect the Government to extend its control over everything, which is why I would like to reiterate Mr Lim’s view asking Singaporeans to practice self-restraint and not be ruled by greed.

Each of us has a role to play in preventing the property market from spiralling out of control, to the extent that prices become unaffordable.

Source: Today, 08 May 2007

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