Singapore’s property experiencing a slow market after the cooling measures

 

Even the biggest property markets in Singapore have been going through a rather slow market ever since the cooling measures were introduced. Experts do not predict a complete downfall of the property market.

This situation has forced the both CFOs of CapitaLand Group and GuocoLand Group to question the acts of the government. Very recently, the government made some changes in the Additional Buyer’s Stamp Duty rates (ABSD). There was a 5-percentage-point increase for citizens and permanent residents who would be buying a second home. These chief financial officers (CFOs) are not sure if these steps were the right decisions.

The CFO, Mr Wong Mun Hoong of Mapletree Investments Group as well as International Property Advisor’s CEO, Mr Ku Swee Yong, gave their input of what they predicted for the future of the real estate sector considering the ongoing trends. These experts believe that the changes in the ABSD won’t be as harmful as to cause a real estate property crash. They can say so confidently because ABSD has been introduced previously too. At that time, there were the same questions. However, the market lasted strong throughout those days despite being slow. The same can be expected this time around as well.

Richard Lai, the GuocoLand CFO, believes that immediate purchases will minimize in the real estate market. But, he also believes that the situation will not be homogenous all over Singapore. Different residential markets will experience different changes that can only be confirmed with time.

People might not hold back making the purchase a residential property if it is a first one. On the other hand, people who were interested in buying second homes will prefer to wait a while and hope for things to get more suitable for them. Experts are expecting a lot of foreign buyers. However, these people will be facing the 20% ABSD which is why they would hold back their purchases for now. Of course, this will affect the property market but it won’t be a long-term damage. For certain foreign buyers, now will be a great time to invest in residential properties in Singapore because there could be a further increase in the near future and the current ABSD rate is still a bargain for them considering their local real estate market.

In the second quarter of 2017, the prices for private residential properties increased by 9.1%. it was a compensation after the 11.6% downfall in prices between 2013 to 2017. Andrew Lim, CFO of CapitaLand Group, gave this example to guarantee that Singapore has been through ups and downs. If one step brought the market down, another step definitely compensated it.

These ABSD rates ensure that Singapore continues receiving interest from abroad. Looking at a broader picture, it is a smart step taken by the government. As for people concerned with property, although it isn’t the best time, it also isn’t the worst.

 

https://www.channelnewsasia.com/news/business/developers-see-property-market-slowing-absd-cooling-measures-10524440

 

 

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