Singapore eases property curbs slightly as economy struggles

Singapore eases property curbs slightly as economy struggles
PHOTO: The Straits Times

Singapore is cutting stamp duties sellers are required to pay on residential properties and easing some rules on borrowing thresholds, as part of a slight relaxation of property curbs imposed since 2009 to rein in the market.

Volumes of transactions in the private residential property market were healthy, with firm demand for private housing, the government said, however, so it would retain the current rates of additional buyer's stamp duty and loan-to-value limits.

"The current set of property market measures remain necessary to promote a sustainable residential property market and financial prudence among households," Singapore's ministry of national development, finance ministry and the central bank said in a joint statement on Friday.

The measures take effect from Saturday.

Shares of Singapore real estate developers, including City Developments Ltd and CapitaLand Ltd, rose on the news. The real estate index was up 1.7 per cent at 0526 GMT.

Stamp duty is a tax on documents relating to property, which has to be paid by both buyers and sellers.

Photo: Ministry of National Development

Singapore said it would cut by 4 per cent points across each category the stamp duty now imposed on residential properties sold within four years of purchase. It will also cut the holding period to three years.

The new rates apply to all residential properties purchased on and after Mar 11 this year.

Rules on the total debt servicing ratio (TDSR) framework will also be relaxed, the authorities added, reflecting feedback from some borrowers that the measure limited flexibility to borrow against the value of their properties and raise cash.

"It shouldn't be viewed as a broad-based easing, but it should help support the property market a bit," said Michael Wan, an economist at Credit Suisse.

Singapore has adopted several rounds of property cooling measures since 2009, including higher stamp duties and tougher mortgage conditions, to clamp down on speculative buying.

The measures helped drive down private residential property prices by 3.1 per cent last year, after a drop of 3.7 per cent in 2015.

 

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