Private residential property prices have dropped by about 11.2 percent since the 3rd quarter of 2013, citing Urban Redevelopment Authority (URA) data.
It‘s the moment for the Government to consider “ thawing” property cooling measures, in according to property consulting firm Jones Lang Laselle (JLL). The consultancy company stated in a study that one cause to re-examine the actions is the significant drop in property costs.
The statement also noticed the cooling measures have caused Singaporeans to put money into house in overseas states including United Kingdom and Malaysia. JLL mentioned even though the value in initial half of 2015 dropped to $400-million in overseas property acquired by Singaporeans compared to over $2 billion in 2013, according to data from Monetary Authority Singapore.
“A more active local residential market will better support growth as it will encourage Singaporeans to invest in Singapore rather than overseas, where risks are higher,” said Mr Chua.
One of the cooling measures is Additional Buyer’s Stamp duty (ABSD) launched in 2011, requires a 7% to 10% duty on Singaporeans purchasing their second and following residential properties, 5% to 10% for permanent residents for first and subsequent properties and 15% on non-citizens.
JLL mentioned the high-end market prices are most impacted, falling by about 18% from 2013 while those of mass-market are down by 11%. Residential transactions also has dropped. Although last year documented a three-year high of 16,378, this still pales when compared to the 22,197 houses clocked in the year 2012, in accordance with URA information.
Mr Chua said that ABSD is weakening demand as “buyers are holding back because they believe that the ABSD is temporary and will be withdrawn or changed”.
He explained the price drops reveal that cooling measures have worked. “Now could be the right time to consider measures that allow the residential market to resume a course for moderate growth and thus avoid a sharper correction down the line,” he added.
He proposed changing the Additional Buyer’s Stamp duty using an extended period property-tax that could direct purchasers towards assessing their capital investment against extended costs including management charges and taxation.