Call for review of property curbs increasingly insistent

Singapore’s second-biggest property developer, City Developments, has been calling on the government to ease the property cooling measures “as soon as possible”, reported the Singapore Business Review.

The company saw its profit fall 16 percent in Q3, on the back of lower contributions from its property development unit. “The Group continues to hold the view that the property cooling measures need to be reviewed as soon as possible, given that the home ownership rate in Singapore is over 90 percent. Timing is the most important factor to achieve a healthy and sustainable property market,” it said in a statement.

Notably, the quarterly Real Estate Sentiment Index released by the Real Estate Developers’ Association of Singapore (REDAS) and the National University of Singapore (NUS) earlier this month showed that market sentiment among property developers had fallen further in Q3 2015. “The sentiment in the market continued to weaken in Q3 2015,” said NUS associate professor Sing Tien Foo.

As such, more respondents called for the removal of “some of the cooling measures, such as ABSD and SSD to arrest the worsening market condition”.

In fact, 83.1 percent of the respondents believed the government should tweak or lift the cooling measures in the next six months. 56.7 percent of them felt the sellers’ stamp duty (SSD) should be lifted, while 60.8 percent said the additional buyers’ stamp duty (ABSD) should be removed.

“ABSD should be removed due to the tight supply of housing in the market. It should not be a permanent policy, as it creates inefficient market equilibrium. Furthermore, it does not encourage financial prudence. MSR and TDSR are based on ratios and percentages; percentages only address the issues of the average category, and could be too harsh or too lenient,” noted one survey respondent.

“The ABSD should be lifted as private residential property prices dropped by about eight percent in Q2 2015, compared to the third quarter of 2013. However, the TDSR Ratio should be retained,” said another respondent.

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