Asking for extra incentives to promote home ownership would have little effect, if homebuyers lack the income to make purchases, says Tan Ka Leong, group managing director of CBRE|WTW.
"We need to increase manufacturing output and export earnings and, in this way, put more money into the hands of households to purchase properties," he told NST Property.
Tan said that despite the fact that property advisors are primarily concerned with the real estate market, a more comprehensive strategy is required in light of the global economic slowdown, declining household income, sluggish export revenues, and weakening Ringgit.
In order to assist the B40 and M40 groups, he suggested that the government may persuade the private sector/employers, ranging from manufacturers to government-linked companies, to offer housing to their employees (single and family), much like the government housing for civil servants.
"They can do this by offering tax deductions for interest expenses of company loans for staff housing, property management expenses for apartment complexes, and possibly annual capital allowances of 5 to 10 per cent of the cost of the housing properties.
The employers are also allowed to acquire low/affordable cost overhang properties as their assets to use as their workers' residential schemes or can rent such housing units for this purpose, Tan said.
"Those transactions for this purpose are exempted from stamp duty. At the same time, this may assist manufacturers to attract more workers to the manufacturing sector, increasing productivity, output, and export earnings, and reducing imports. Providing worker housing may also help reduce staff turnover and stabilise the workforce," he said.
Meanwhile, Tan said that to increase foreign property purchases, it may be more fruitful to focus on the Singapore and Asean market instead of looking further afield.
He said the government should consider providing a lower minimum housing threshold price for Asean citizens such as Singaporeans, Indonesians, and Thais, and extend this privilege to other nationalities in these countries who have a permanent residence and work permit to reside.
"We believe such buyers have made a commitment to build a life and future here and are likely to buy homes for their occupations," he said.
On another matter, Tan said in order to make houses more accessible, improvements should be made to the public transportation system.
Developers are also encouraged to operate bus services in their new township schemes.
"New large-capacity buses require significant investment and initial revenue will be less than break-even, therefore losses incurred by the bus operation in the first five years should be allowed to be offset from development profits. In the long term, this will open opportunities to private bus operators to improve efficiency and the attractiveness of using public transportation," he said.
Tan also encouraged the adoption of IBS in construction and reduce the current pressure of labour shortages.
He said additional incentives must be given to developers and tax relief to manufacturers of IBS components, to provide a reasonable price for these products.
He further said that the installation of solar panels in existing properties should be granted tax relief in order to encourage the usage of renewable energy and reduce electricity consumption/dependence.
"This could translate into lower diesel usage, reduced oil imports/increased crude oil exports," he said.