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ABSD to have ripple effect on housing prices

Posted on 9 Jul 2012 | Comments Off

The additional buyer’s stamp duty (ABSD) imposed on foreigners purchasing private homes in Singapore has had a ‘ripple effect’ on prices and will eventually cool the market, said a property expert.

Dr. Liao Wen-Chi of the National University of Singapore’s Department of Real Estate said that while foreigners commonly acquire properties in the central region, a decline in purchases due to the ABSD is expected to bring prices down in suburban areas as well.

Analysis done on the property market from 2004 to 2007 showed a ripple effect whereby rising home prices in the central region caused similar upticks in other districts.

Dr. Liao noted that the opposite could be a possibility as well.

Research suggests that “with careful policy properly affecting the inflow of foreign liquidity to Singapore’s real estate market, the government is able to keep a healthy growth of the market and ensure affordable housing”, he said during a real estate conference held at Marina Bay Sands, organised by the American Real Estate and Urban Economics Association and Asian Real Estate Society.

Meanwhile, Minister of State for National Development and Trade and Industry, Lee Yi Shyan, said that the government has sought to create a “sustainable, stable and transparent real estate market”.

He added that aside from taking a multi-stakeholder approach, the participation of academia, researchers and real estate professionals will help in the creation and implementation of better policies.

Source : PropertyGuru – 2012 Jul 9

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Posted in Cooling Measures, Property Market / Real Estate

Tagged ABSD, additional buyer’s stamp duty, Singapore Property, Singapore Real Estate, Singapore Residential Property

Ripe pickings

Posted on 9 Jul 2012 | Comments Off

Usually, a property in Singapore’s Districts 9, 10 and 11 would cost an arm and a leg.

However, with new launches in the suburbs commanding a higher per sq ft pricing, it has made prime properties affordable in comparison. In fact, the second quarter witnessed resale activity taking place again in prime areas after the doldrums post-ABSD.

What is causing this strange market dynamics?

Firstly, there was a slight drop in pricing in districts 9, 10 and 11 as transactions took a dive for a while as investors retreated from the market after the ABSD was implemented.

Secondly, CapitaLand’s Sky Habitat launch has had a lifting up effect on prices in the suburbs with other developers now following suit.

Sky Habitat managed to shift units despite the steep pricing of around S$1,700 (US$1,337) to S$1,800 (US$1,415) per sq ft. This price range is similar to what resale properties in prime areas would be asking for. In fact, if you were to look a little closer and do some homework, you can get distressed assets in prime areas for around S$1,400 (US$1,100) per sq ft.

This anomaly makes in an incredibly attractive preposition for cash rich investors to look into buying a completed property in prime areas rather than wait three years for a new one to be completed in the suburbs. It appears that Orchard and other prime areas are now blossoming.

Source: PropertyReport – 2012 Jul 9