BIZ-PROPERTY: Singapore moves to cool down resurgent property market
SINGAPORE (AFP) – Singapore raised buyers’ fees and tightened loan requirements from yesterday to cool a resurgent property sector, warning that rising prices could be destabilising amid climbing interest rates.
Private residential prices in the affluent city-state have surged by 9.1 per cent over the past year on strong demand after declining gradually for close to four years, the government said.
A statement, issued jointly by the central bank and the ministries of finance and national development, warned that the rise in property prices must not “run ahead of economic fundamentals”.
Allowing prices to surge unchecked could “raise the risk of a destabilising correction later, especially with rising interest rates and the strong pipeline of housing supply,” the statement added.
The government raised by 5.0 percentage points the additional buyer’s stamp duty (ABSD), a fee applied to the purchase price or current market value of a property, for Singapore citizens and permanent residents buying a second and subsequent house. Citizens buying a third home and permanent residents buying a second home will now pay 15 per cent in ABSD fees.
Foreign individuals buying any residential house must pay 20 per cent and foreign entities 25 per cent. The loan-to-value limits for property purchases were also tightened by five percentage points.
“The revision to ABSD rates is likely to lead to a slowdown in the recovery of the private property market,” said Lewis Ng, chief business officer of industry specialist PropertyGuru Group.
For example, a person looking to buy a second unit worth SGD1.0 million (USD733,000) will have to pay an additional SGD50,000 in cash, and a total stamp duty outlay of SGD144,600, he said.
DBS Bank said the new cooling down measures caught the market by surprise.
But Ng said that “while this might be painful for home-seekers in the short term, it will enforce financial prudence and create a more stable property marke
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