Reported in propertyguru.com.sg under the property news section, Donald Han, Managing Director of Chesterton Singapore said that the current cooling measures in Singapore could be eased as early as second half of 2016. The trigger would be the continuous fall in private home prices. He said that the easing would start as soon as price drops around 15 percent. This would already cause property owners to slip into negative equity. As per the The Urban Redevelopment Authority’s (URA) residential price index, the price has already dropped 8 percent from the peak in Q3 2013. The “9th cooling” measure is the rising interest rates which are already happening.
He predicted that a “A reduction in the ABSD (Additional Buyer’s Stamp Duty) is most likely, but a reduction in the SSD (Seller’s Stamp Duty) could also materialise, should there be higher instances of mortgagee sales. The TDSR (Total Debt Servicing Ratio) is unlikely to be removed, however.” He said that even with the easing and demand from PRs, the prices would continue its downtrend till 2018. New sales of 7,000 to 8,000 units are likely to be norm and there are 24,000 units of unsold stocks to be cleared in 3 years.
I think Han is only predicting because he is not from the Singaporean government. However, as we always love to see Singapore as being much more pro-active than Malaysia, do you believe that the cooling measures implemented thus far would be eased? If we base this on the numbers shown thus far where prices are concerned, I think the cooling measures are still going to be in place. Transactions have been dropping but prices have not really moved in tandem. I personally think perhaps the more affordable and smaller units being built and sold today would slowly push the average property prices downwards.
The cooling measures have achieved its objective; slowing transactions and property prices rising too fast. Even the Singapore government did not put up cooling measures to push prices back to the levels many years ago. That’s not a wise thing to do. Let’s keep tracking what Singapore does next in terms of cooling measures. Happy buying if you are still looking for your first home.
written on 14 Dec 2015
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