The new Singapore property cooling measures might see a slow down in the new home sales for December and curbed momentum in the en bloc market.
Analysts expect the latest property cooling measures, which describe as “harder hitting”, to slow price growth and home sales as well as significantly hamper the en bloc market, reported Channel News Asia (CNA).
Despite signs of the market heating up, the “decisiveness” with which the cooling measures were imposed was unexpected. Notably, they were announced about 25 minutes before they take effect on 16 December.
Much like previous cooling measures, Huttons Asia’s Senior Director of Research Lee Sze Teck expects to see a “knee jerk reaction immediately as everyone tries to understand and assess the impact”.
This means new home sales for December may slow to between 400 and 600 units, and volume could ease for the next few quarters in 2022, he said.
Tricia Song, Head of Research for Southeast Asia at CBRE, expects next year’s new home sales to “trend down from the current 13,000 units to a normalised 9,000 to 10,000 units”.
She expects prices to be flat, or increase by 1% to 3% in 2022.
While volume may taper off, Edmund Tie CEO Desmond Sim does not expect the measures to cause “a total nullification of enquiries” since there are still genuine buyers within the market.
The new measures are also expected to affect the en bloc market, which appeared to have gained momentum recently.
Under the new rules, entities purchasing residential properties must pay 35% ABSD, up from 25% previously, if they could not sell all their units within five years. Developers also face an additional 5% non-remittable ABSD.
Colliers Managing Director Tang Wei Leng said developers would have to consider the “additional tax impact and buyers’ concerns about the future selling prices, as well as how these will affect demand and the take-up rate”.
En bloc hopefuls, on the other hand, will have to review their expectations since it may take longer to “manage and negotiate the price gap” resulting from the new measures.
The new measures will see developers become more selective with their land acquisitions, said Professor Sing Tien Foo from the National University of Singapore’s (NUS) Institute of Real Estate and Urban Studies.
“The bigger plots will get more and more difficult (to work with) because of the 35% ABSD. To sell big projects – above 500 units – is quite challenging,” he said as quoted by CNA.
Sim, however, believes the new curbs have not entirely “killed” the en bloc market, saying that a project may still be sold en bloc if its pricing and location are attractive.
Cheryl Chiew, Digital Content Specialist at PropertyGuru, edited this story. To contact her about this story, email: email@example.com.