Fat profits from flat sales

PUBLISHED : Tuesday, 19 April, 1994, 12:00am
UPDATED : Tuesday, 19 April, 1994, 12:00am

SPECULATORS buying property they do not need is largely responsible for the housing shortage, which leads to higher property prices.

Property developers are also responsible for pushing the market up, by setting high prices for new flats. Then when speculators enter the market prices soon spiral out of control.

Developers themselves add to the shortage. In any sale of new properties, many of the units (usually the best flats) have been pre-sold or reserved for the developer's friends or relatives. How else would estate agents have flats for sale in new developments even before units are on sale to the public? Whatever Governor Chris Patten may say, the Government is not sincere in bringing prices down - higher retail prices secure higher returns when the Government puts out land for auction.

In other words, the Government has a vested interest in keeping the price of land high. The only effective and immediate solution is to impose capital gains tax on any property which is not being used by the owner as the sole residence for himself or his children. In this way, genuine end-users can benefit from the capital growth on their own flat, but speculators will be taxed on their monetary gain.