The government just announced new cooling measures in the form of lower loans to value loans and increasing the extent of seller’s stamp duty. The previous round of measures certainly did not have the desired result given that prices have been creeping up again after stabilizing for a while.
The sheer amount of liquidity and low interest rates have combined to fuel this property price increases. In fact, developers have been talking up the market, threatening to increase prices. This reminds me of the Chinese scenario where the developers held their stand and kept prices high. They tested the government’s will and have succeeded to a great extent.
What holds for this round? I don’t know why but I have an uneasy feeling. I cannot explain why but my optimism is tempered to a certain extent.
I will organize a session with my past students to discuss this soon.
Till then, take care