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It is often pointed out that the region's real estate market needs more end-users as home buyers. Now a leading bank has sounded alarm over what it called "excessive speculation" in the property market, which is increasingly attracting foreign investors. With regional banks flush with cash, it is easy for speculators to borrow large amounts of money and use it to invest in the off-plan market, without the intention of taking possession of the property. This kind of behaviour can be detrimental for the whole industry, with equally bad side effects for the local economy.
One of the steps being suggested to curb property speculators is that a capital gains tax on properties bought and sold within a period of 12 months should be introduced.
It may be drastic measure for a region that promotes itself as a liberal tax-free haven but authorities should act to deter those who are distorting the real estate market. We are witnessing a healthy property market in the region, one that is likely to continue growing despite the global financial turmoil. But property in itself should not be treated as a stock-market commodity. Homes have a longer-term value than any shares.
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