SINGAPORE (June 30): Singapore’s property cooling measures are here to stay, according to the Monetary Authority of Singapore (MAS).
The central bank said residential property transactions increased in 2016 compared with 2015 due to healthy sales at project launches and better matching of price expectations between buyers and sellers in the resale market. And the trend continued into the first quarter (1Q) of 2017 on the back of low interest rates and continued income growth. Transaction activity in 1Q increased by close to 40% compared with average quarterly transactions since the implementation of the total debt servicing ratio (TDSR) framework in 2013.
“Underlying demand for private residential properties remains firm amid a continued low interest rate environment,” said MAS managing director Ravi Menon yesterday as the central bank launched its 2016/2017 annual report.
“It is, however, not time yet to ease the cooling measures,” he added. “They remain necessary.”
Prices in Singapore’s residential property market have fallen by nearly 12% after 14 consecutive quarters of decline. Since 2009, the government has implemented macroprudential measures — commonly known as property cooling measures — to promote a sustainable residential property market and financial prudence among households.
In March, calibrated adjustments were made to the seller’s stamp duty (SSD) and TDSR framework to address specific feedback and market conditions.
However, Menon yesterday stressed that the adjustments “do not signal the start of an unwinding of the property cooling measures”.
“The adjustments in March were made for very specific reasons and purposes,” Menon said.
Rates for the SSD were lowered by four percentage points and the holding period for residential properties was lowered to three years, from four years previously. Under the revised SSD framework, owners who sell a residential property within three years of purchase will pay a tax of between 4% and 13% of the property’s value.
Menon said the SSD rules were adjusted because “speculative flipping of properties had declined significantly”. — theedgemarkets.com.sg
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