Category Archives: Cooling Measures

Call for review of property curbs increasingly insistent

Posted on 18 Nov 2015 | Comments Off on 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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Govt may review cooling measures by year-end

Posted on 3 Jul 2015 | Comments Off on Govt may review cooling measures by year-end

The authorities are likely to review the existing property curbs later this year to ensure a soft landing in Singapore’s residential market, according to a recent Business Times report citing UOB Research.

In light of the bank’s forecast that home prices could suffer a drop of 5.0 to 10 percent in 2015, the government may reduce the seller’s stamp duty (SSD) and lower some selected tax rates under the additional buyer’s stamp duty (ABSD).

“In our view, it may make sense to tweak some of the stamp duty measures such as the ABSD and SSD as market speculation has fallen significantly,” it said.

Aside from that, home buyers are already barred from borrowing beyond their means due to the Total Debt Servicing Ratio (TDSR) framework and the caps on loan quantum.

However, UOB feels the government will only ease the existing cooling measures once prices have fallen by at least 10 percent.

“The government is unlikely to act in the absence of a larger price decline as the sharp rise in property prices was a key flash point during the last ‘watershed’ general elections,” explained the report.

Looking back, the authorities only responded when Singapore’s residential market was impacted by major external shocks like the Asian Financial Crisis in 1998 and the dotcom bubble that happened thereafter. Home prices here dived by 45 percent and 20 percent respectively during those periods.

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