I REFER to yesterday’s letter from Mr Ng Kwong Yee (‘Room for pragmatism’).
I agree with most of his comments on appreciating values and preferences of flats in various locations, but not with his comments on rental.
The reason for ever rising valuation and cash-over-valuation of flats is clear – buying and selling.
Some buy to have a roof over their heads, whereas some sell and then buy again to upgrade. Then there are those who buy now to save money as it is cheaper than waiting until prices go up again. No matter how you look at it, when you buy or sell, the price is never the same.
From the main context of previous discussions, it is buying and selling that causes movement in the value of HDB flats – not rental. When one buys and then rents out, it actually relieves market tension by reducing the number of people who would otherwise be in the buying market. When more people rent, fewer people buy and prices are not driven higher. And when the landlords decide to keep their flats for rental, the speculative part of rental property also disappears.
Yeo Shuan Chee
Source: Straits Times, 9 Feb 2010
No comments:
Post a Comment