Given present market conditions, it is less likely that the government will roll out new property cooling measures, said economist Chua Hak Bin from Bank of America Merrill Lynch (Singapore).
“A fragile economic outlook and softness in the broader property market suggests that another round of measures may be unwarranted at this point. The last round of measures in December last year already dealt quite a severe blow to overall sentiment and transaction,” said Chua in a report titled ‘Singapore: More property measures?’
In the first quarter, private home prices slipped 0.1 percent compared to the 0.2 percent rise seen in Q1 2011. In addition, he noted that transaction values and volumes plunged 26 and 14 percent respectively in Q4 2011, as a result of the latest curbs.
The luxury property market, which covers residential properties worth more than S$5 million, has also “practically collapsed”, as the segment witnessed a 61 percent decline in transactions.
As expected, foreign buying activity dropped considerably, recording a muted 22.7 percent share of all transactions in the first five months of 2012, down from 34.7 percent over the same period last year. The decline was attributed to the introduction of the additional buyer’s stamp duty (ABSD).
On the whole, foreign purchasers dropped 48 percent from last year.
However, some foreign buyers, especially those from the US, Norway, Switzerland, Liechtenstein and Iceland, were exempted from the ABSD due to bilateral free trade agreements.
Chua said that buyers from those exempted countries sustained their buying habits post-ABSD, a further indication of the impact the cooling measures have had on dampening foreign buying.
Source : PropertyGuru – 2012 Jun 15