The RPGT has long been seen as an “unnecessary” obstacle to the nation’s attempt to attract more foreign direct investment. News reported that doing away with the RPGT will spur foreigners to snap up our property as they would not have to worry about having to pay a flat 30% RPGT when they sell it off in say, one to five years’ time.

There are also those who feel that doing away with the RPGT will not have a big impact, as generally people do not dispose of their property within the first five years. I agreed that the abolishment of the RPGT will brings some relief and excitement to the property market but it will not bring the crazy-rush to the already over-supply market.

You simply have to relook back at the previous 1993-94 Super-Bull run period where the speculators were seen snapping properties as if it’s buy-1-free-1 sales. The main difference between now and then was the cash flow that individual possess. Back then; people were making money almost daily from the stock market. Everybody were trading without money – the fact that they traded within T+7 (you only settle the trading amount on the seventh day from the transaction date) and still makes good money created an illusion that they’ve finally found the ultimate money-making machine. And when you and any of your friends who have not even graduated from high-school or college are making money more than a company’s director paycheck, you’re simply hooked to the system.

When these people were making money continuously from the stock market, it created an instant wealth, so much so that they actually do not know where to park their money. Property was their next target – so people started to snap-up any new project being launched. Queuing for nights just to get hold of the property was a normal process then. Most of them are not first time buyers – they’re buying it for investment hoping to get rid of it immediately when there’s a buyer. Property’s price skyrocketed because the overwhelming demands versus supplies. It thus created a bubble (when the 1997 crisis arrived).

Forward to the future – the year 2006-07. Stocks were said to be in the bull-run starting in the 4th quarter of 2006 but tons of people brushed it off as the sign for an early general election. Some of the unhealthy-signs: