SINGAPORE - Singapore's authorities should review measures designed to cool the city-state's property market as share market volatility could worsen a current downturn, the head of the property developers' association said.
Singapore's real estate market is facing multiple challenges, including a slowing economy, rising interest rates, potential oversupply in some segments and an increase in vacancy rates.
Measures introduced to curb property prices have helped push down prices of private homes for nine straight quarters and hit sales volumes. "With safeguards in place such as the continuation of the prudent TDSR (total debt servicing ratio) measures together with the current economic situation, property prices will be kept in check," said Augustine Tan, president of the Real Estate Developers' Association of Singapore. "It is therefore timely to consider a calibration of the cooling measures." Singapore's government has embarked on several rounds of measures designed to cool the property market since 2009. Steps include higher stamp duties and tougher mortgage conditions.
Developers in Singapore must also pay 'extension charges' if they fail to sell homes within certain timeframes as well as face additional stamp duties on unsold homes.
Tan said that industry-wide, developers could be hit with extension charges of S$100 million this year for about 700 units, while some 6,000 private homes could incur additional stamp duties if they remain unsold in 2017 and 2018.