According to economists, the price caps placed on private homes may lead to price change in the private home market. The caps might actually make housing affordable-but impractical.
In a lecture by Ho Kwon Ping, he said that the Housing Board would redefine its role by incorporating sales price caps on housing units and auction lands to private developers. This step will make all of the housing projects private.
To Bayan Tree holdings, price caps would make houses affordable and within easy reach to Singaporeans. Also, it will tear down the barrier between private housing and public housing.
Some critics believe that housing caps would not work especially with the recurring resale market fluctuations and quality control issues as foreseeable crisis.
Century 21’s Chief Executive, Ku Swee Yong, said in an interview that private developers target to improve their profits but with price caps, they might “cut corners”.
Walter Theseira of Nanyang Technological University, Assistant professor, agreed with Yong stating that the caps need a strong intercession by the Singaporean Government.
Nicholas Mak’s perception of this cap, the Research Head of SLP International Property, leads to imbalance between demand over supply. He said that if the price cap is very high, developers might end up with high supply of flats and if the cap is too low, people would go loco over underpriced flats.
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