Singapore announces new measures to cool property market

SINGAPORE: Singapore on Thursday, Jan 13 introduced new measures to cool home prices that have continued to rise despite earlier efforts to put a lid on a red-hot property market.

Effective Friday, those who buy and sell residential properties within four years will have to pay a stamp duty, up from the current requirement of three years.

Individual buyers who are still servicing an existing loan can only borrow up to 60% of the new property's value, down from 70% at the moment. For corporate investors, the loan-to-value limit will be cut to 50%.

"Previous government measures have to some extent moderated the market, but sentiment remain buoyant," the finance and national development ministries said in a joint statement with the central bank.

"Low interest rates plus excessive liquidity in the financial system, both in Singapore and globally, could cause prices to rise beyond sustainable levels based on economic fundamentals," the government agencies added.

Singapore home prices rose to record levels in the fourth quarter, but at a slower pace, prompting some observers to suggest the government may hold off implementing new measures.

The city-state last announced measures to cool its property market on Aug 30 last year.

Many Asian countries, in particular Singapore, Hong Kong and China, face threats from asset bubbles, particularly in the property sector, fuelled by strong economic growth in the region and cheap money flowing in from the West.

In late November, Hong Kong announced some of its toughest-ever measures to cool the property market, applying a stamp duty of as high as 15% on apartments sold within six months of purchase, and tightening mortgage restrictions.

Singapore private home prices rose 17.6% last year, according to flash estimates from the Urban Redevelopment Authority. — Reuters
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