What Happens Next for the Property Market?

October sales of private property in Singapore picked up to 1058 units sold, a 16% jump from September figures despite the cooling measures that was cemented the previous month.  The latest measures were a sellers’ stamp duty of 3% of the sale price if they sold their place within 3 years of buying them and a 10% instead of 5% cash downpayment for their second property, amongst other measures to slow down the property buying frenzy.  Property pundits and agencies, worried that the government might stack up more cooling measures if demand spurts again, explained that the jump in demand was overrepresented by interest in Esparina Residences (425 units sold) and The Canopy (104 units sold). Executive condos were also incidentally back in demand.

What more can the government do to rein in property speculators? Hong Kong recently leashed its property market by introducing a seller stamp duty of 15% if the property is sold within 6 months of purchase, 10% if resold between 6 and 12 months and 5% if resold between 12 and 24 months.  That is a real ball and chain to a runaway property market and Singapore might even get ideas from Hong Kong.

Nov 23, 2010
Steps to cool market, if…

THE Government is keeping a close watch on the property and financial markets as the buoyant Singapore economy – along with others in Asia – becomes a magnet for money in search of good returns.

If necessary, additional steps will be taken to keep property prices from soaring, said Finance Minister Tharman Shanmugaratnam yesterday.

He also assured Singaporeans that there was no need to worry about the negative impact of these capital inflows because Singapore’s financial markets can manage them efficiently.

In essence, the financial system here is able to take what is needed for domestic consumption and ‘recycle’ the excess liquidity back into foreign markets, he said.

Mr Tharman made these points in his reply to MPs worried about the impact of the new United States policy to spur its dormant economy. Those who raised their concern included Mr Liang Eng Hwa (Holland-Bukit Timah GRC) and Nominated MP Teo Siong Seng.

The US Federal Reserve said recently that it would inject US$600 billion (S$779 billion) into the economy by buying long-term US Treasury securities.


3 responses

  1. Snoopy

    The statistics are based on private housing which forms a small segment of our total housing.

    So long as 80% of our housing, in particular public housing, are sufficiently regulated( keep foreign speculators away from this market), should we be overtly concern about the private housing market??

    Maybe we should just leave the private housing, and the rich, to the market so long the vast majority of public housing, both new and resale, remains affordable or accessible to anyone who needs a home?

    November 25, 2010 at 6:33 pm

  2. Lester

    The private market is not a bread and butter issue. We should assume that the rich who has the means to invest in this exclusive market should also possess the financial prudence when comes to investment.

    So why should the government interferes in this market? So long as measures have been put in place to detach the private housing market from our general housing and economy, these richer folks should be allowed to take their own risks.

    November 25, 2010 at 7:55 pm

  3. chemgen

    Snoopy and Lester
    I agree somewhat with what you are trying to say and caveat emptor in property buying. However, for better or for worse, HDB property prices pace that of the private homes. Look at the COV for resale HDB flats. New homeowners are feeling the pinch. Hence, the government still needs to regulate and prevent a property bubble bursting.

    December 1, 2010 at 12:05 am

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