Government unlikely to ease cooling measures as election nears: Experts

Victor Kang18 Dec 2019

Singapore property

Loosening property curbs would be an unpopular decision, analysts say.  

It is highly improbable that Singapore will ease property cooling measures as it nears a “high-stakes” election, reported Bloomberg.

Despite several developers calling for the loosening up of the measures to cope with the property glut, the ruling People’s Action Party (PAP) is not keen on the idea, the report said.

The report also quoted analysts, who stated that the relaxation of property curbs might result in a significant price increase, making it even more costly for citizens to purchase private apartments. 

The country is currently facing a housing oversupply that could take up to four years to resolve, as there are around 32,000 units still in the pipeline.

While home prices saw a drop following the latest round of cooling measures implemented in July 2018, they’ve increased again in recent quarters.

“Relaxing curbs is likely to be unpopular ahead of the upcoming general elections and could potentially spike up prices amid volatile market conditions in neighboring countries,” said Vijay Natarajan, Analyst at RHB Research Institute Singapore.

“Any pre-election goodies are likely to be focused on the public housing segment where the government has already announced enhanced grants to support resale market prices,” he added.

Although elections are currently scheduled on April 2021, they could be called as early as March after the government’s unveiling of the budget in February. The PAP is expected to win the elections, as it garnered almost 70% of the votes during the 2015 elections.

Even if the party were to make minor adjustments such as lowering the Additional Buyer’s Stamp Duty (ABSD) developers must pay to 20%, a backlash could occur.

“The opposition may simply say that the government is helping developers by lowering the ABSD and all sorts of well-sounding arguments will crop up online. The best thing is to just get the election over and come back down to making rational decisions,” said Alan Cheong, Senior Director at Savills.

RELATED: Presenting The Singapore Property Market Outlook 2020

Macroeconomic conditions still guide government action: Expert

Christine Sun, Head of Research and Consultancy at OrangeTee & Tie Pte, believes various factors such as macroeconomic conditions could have a more vital role compared to politics in determining whether property curbs should be relaxed.

She noted that the government seems content with the current rate at which prices are increasing, while buoyant sales should assist in absorbing unsold units.

“It’s unlikely they’ll want to change things too drastically now,” she said

Cheong, however, believes that the cooling measures should be adjusted at some point in time as the inability of developers to sell larger units is preventing a smooth functioning market.

He suggested that stamp duties for citizens and foreign buyers could be recalibrated, while developers’ levies should be subject to a tier based on the size of their projects. “Whether they will tweak or not is their prerogative, however we feel that whenever measures are implemented, a feedback and action loop must be in place,” he said.

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Victor Kang, Digital Content Specialist at PropertyGuru, edited this story. To contact him about this or other stories, email


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