The ABSD is making it difficult for Singaporeans to buy residential property.
The government should consider the gradual and calibrated approach of lifting the Additional Buyer’s Stamp Duty (ABSD) for Singaporeans, as it makes it harder for them to buy a home, said MP Christopher de Souza in Parliament recently, reported The Business Times.
He first put forward this suggestion in January (MP urges removal of ABSD for Singaporeans).
On the other hand, the ABSD for foreigners should remain to deter speculative activity.
Similarly, the authorities should keep the Total Debt Servicing Ratio (TDSR) framework in place for local and overseas buyers, to ensure they only purchase homes that they can afford.
“This should allay any concerns that easing the property cooling measures will cause a surge in Singaporeans purchasing second properties when they may not be able to,” he explained.
Following the introduction of the ABSD in 2011 and the TDSR framework in 2013, construction activity in the private housing and industrial segments have slowed down significantly.
The construction industry’s growth softened from 3.5 percent in 2014 to 2.5 percent last year. In turn, the Ministry of Trade and Industry warned that the construction sector’s lacklustre performance is among the factors that would negatively affect the economy in 2016.
However, Finance Minister Heng Swee Keat said in his recent budget speech that it’s still too early to ease the property cooling measures, based on their assessment of current home prices and prevailing market conditions.
Meanwhile, de Souza urged the government to look at Australia’s approach in bringing down home prices. Under recently enacted policies there, foreigners can only buy new homes and they cannot sell them to other overseas buyers.