It appears that speculators are fleeing Singapore’s real estate market in droves due to the Government’s property cooling measures, particularly the seller’s stamp duty (SSD).
Figures from the Urban Redevelopment Authority (URA) revealed that sub-sale transactions slumped in Q4 2013 to 147 units; its lowest level in eight years. Previous lowest figures were recorded in Q1 2006, at only 127 sub-sale transactions.
Notably, this type of deal comprise of units that were sold even before their completion. This is used to gauge the level of speculation in the property market.
Property experts noted that the main reason for the significant drop in speculative demand is the introduction of the hefty SSD in January 2011 which required home owners to pay a levy of 16 percent if they resell their units within four years.
Jones Lang LaSalle’s National Director of Research and Consultancy Ong Teck Hui, explained that investors are now compelled to hold onto their property for a longer term if they wish to escape the stamp duty.
"The number of speculators would not be increasing with the duty in place – this group would have shrunk over the years as they gradually off loaded their properties to take profit."
In total, there were only 1,072 sub-sale deals last year, accounting for 4.7 percent of all sales, its lowest level since 2005.
This is in contrast to 2007, when sub-sales flourished and ‘flippers’ queued overnight to buy a unit, then sell it within days, added Nicholas Mak, Research Director at SLP International.
Christopher Chitty, Senior Content Producer at PropertyGuru edited this story. To contact him about this or other stories, email christopher@propertyguru.com.sg
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