While it is not believed that the rise in the value of Buyer Stamp’s Duty will affect the current recovery of the property market in Singapore in any way, this change may affect the prices of future projects. The much higher prices of land, which falls in the expenses supported by developers, is another factor that can lead to a price rise as well, according to specialists. According to Mr. Augustine Tan, who is the president of Redas, or Real Estate Developers’ Association of Singapore, the sudden increase in this particular stamp duty will not impair the recovery of the market in this sector, although it may cause a certain degree of friction. Home buyers are still reacting to prices in a very sensitive manner, but they will still do their best to obtain the desired property.
Mr. Tan spread the good news at a lunch during the Spring Festival, an event that is celebrated every year by Redas. Having no less than 620 guests, there were plenty of people to hear the news and share them with the rest. As Mr. Tan said, the recovery of the market is just in its beginnings, but the feelings are positive about it and it is expected to the trend to continue in the same manner. Although there are circumstances that are difficult to predict, the economic growth recorded in Singapore in recent times, which is more than expected, gives everyone hope that that the positive trends will remain the same in the following years.
But, in spite of all these increased, the property prices in Singapore are still affordable, if we are to compare them with what you can find in larger cities like London or Shanghai. While it takes 14 or 15 years to afford a property in Beijing or Shanghai, and 8 and a half years to afford one in London, it takes only 4 or 5 years to be able to afford one in Singapore. So, the situation is by far a grim one. It is also worth mentioning that the rise in buyer’s stamp duty applies only in the case of properties that cost more than $1 million. For the properties that have a selling price of $1 million or less, the stamp duty will remain in the 1 to 3% area, as it did so far.
Let us not forget that property prices were on a constant drop in the past years, falling 3.7% in 2015 and 3.1% in 2016. Last year the first raise was recorded, of 1.1%, in the past 3 years, so we are still far from having to face large prices. Desmond Lee, who is the Second Minister for National Development said that even though he is confident in the market growth Singapore is enjoying at the moment, the number of properties that will be available for sale will likely double or go beyond this threshold in the near future. At the end of 2017 alone there were no less than 17,000 unsold properties, so we tend to believe Mr. Lee. Mr. Tan added the fact that there may be more than 34,400 private residences available on the market between 2018 and 2019, a number that is generated by the sales of land sites that have not received planning approval just yet. But he also said that the limited land availability in Singapore will lead to the development of properties with mix uses, if the country and its developers wish to maintain the economic growth and meet the demand.
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