Property agents who broker short-term leases may lose licence

Posted on 12 Apr 2016 | Comments Off on Property agents who broker short-term leases may lose licence

Some agents are facilitating short-term rentals due to the sluggish housing market.

Property agents who violate the rules against short-term leases of residential properties for less than six months may lose their licence, according to the Council for Estate Agencies (CEA), reported The Business Times.

“Property agents have to be mindful at all times that they are required to comply with the Estate Agents Act (EAA) and its regulations when conducting estate agency work. They should not do anything that abets or facilitates anyone to breach any law or regulation,” said Acting Deputy Director for Licensing, Chua Geck Siang.

However, there are some agents who facilitate short-term rentals due to the sluggish housing market, even though the commission for facilitating such transactions is not as high as brokering sales. They usually receive half-a-month commission per year of tenancy.

Some agents were found to be referring potential clients for stays of under six months at St Thomas Lodge, Devonshire Apartments and Oxley Thanksgiving Residence, even though none of the three have been granted permission to be operated as a serviced residence.

“Agents who engage in these activities are either desperate or not well-informed. If they want to earn this kind of money, they might as well drive (for) Uber to earn money legally,” said Eugene Lim, Key Executive Officer, ERA Realty.

However, enforcing the rules against short-term leases is tough, especially for private properties. To skirt the rules, some landlords use a standard contract of six months with early termination clauses.

Further exacerbating the problem is the popularity of short-term rental portals like Airbnb and Homeaway, as well as the significant supply of studio and shoebox units, coupled with the strong demand from foreigners who work or study for a few months in Singapore.

As such, Century 21 Singapore CEO, Ku Swee Yong, is urging the various government agencies to work together to define the laws and increase enforcement against short-term leases.

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Posted in CEA, Rental / Lease

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De Souza once again calls for removal of ABSD for Singaporeans

Posted on 9 Apr 2016 | Comments Off on De Souza once again calls for removal of ABSD for Singaporeans

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.

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Posted in Cooling Measures

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