Everyone, from property industry professionals to home buyers, were caught off guard when the government announced the latest cooling measures, with many analysts and developers stating that they were unexpected and the harshest they have seen by far.
“At first glance, these latest cooling measures do seem pretty drastic, especially when both transactions and price growth in Singapore are declining and there is significant supply coming into the market during 2012/13,” said PropertyGuru Group CEO Steve Melhuish.
The government imposed a 10 percent additional buyer’s stamp duty on foreigners and non-individuals acquiring property in Singapore, affecting both foreign investors buying private properties and Singaporeans purchasing their second and subsequent properties.
“These latest measures on the stamp duty comes as a surprise at a time when transactions are slowing down by 20 percent quarter-on-quarter and price growth is moderating at an increase of 1.3 percent quarter-on-quarter in the third quarter,” noted Tejaswi Chunduri, real estate analyst from PropertyGuru.
“It seems the government is more concerned about speculation and foreigners buying property in Singapore. The previous measures announced in January have certainly helped reduce speculation,” she noted.
Meanwhile, some market watchers agreed with the government’s move, saying that the previous curbs have had little effect, especially on foreign buyers.
“I do agree with the timing in which our government has taken action,” said Raymond Chow, CEO of Ray International Real Estate Group. “As you know, it is the foreigners who have been purchasing at high prices and thus pushing up selling prices higher than expected or valued.”
However, Melhuish noted that foreign buyers account for less than 10 percent of transactions.
“We have to question whether foreigners will start to look elsewhere with the increasingly expensive cost of living. Malaysia and Hong Kong could well become a more attractive destination for expats,” he noted.
Related Stories:
Government imposes additional tax for private property
14100 potential private homes under GLS 1H2012
Complaints of misleading property ads on the rise