Still too soon to lift property curbs: MND

REAL estate players hoping for property market curbs in Singapore to be loosened sometime this year might do well to prepare themselves for a longer wait.

It is too soon to lift the cooling measures, the Ministry of National Development (MND) said in a written reply on Monday to a question posed in Parliament.

"The property market cooling measures are intended to keep the market stable and sustainable. It is too early to relax the measures now. Doing so could result in a market rebound," it said.

"The additional buyer's stamp duty (ABSD) was introduced to moderate the demand for residential property from investors, non-citizens and corporate entities. Singapore citizens who do not own any residential property do not need to pay ABSD," it added.

The ministry was responding to a question from Christopher de Souza, MP for Holland-Bukit Timah GRC, who had asked the Minister for National Development whether he would "consider reviewing the property market cooling measures" by removing ABSD for Singaporeans but retaining ABSD for foreigners.

His question follows continued calls by real estate developers for property curbs here to be tweaked or lifted amid continued sluggishness in the local property market, as they gloomily watch their fortunes decline along with their sales.

Billionaire Kwek Leng Beng, who has repeatedly called on policymakers to ease up on curbs, said last week that he thinks some measures could be relaxed this year.

"They will press the button at the right time although developers are hoping they will do it sooner than later," Mr Kwek, the executive chairman of City Developments, was quoted by a Bloomberg report as saying. "I think they will do something this year, that's my speculation, as there are a lot of mid- and low-end homes coming up. I suspect it will be the abolishing of the buyer's stamp duties." Mr Kwek is likely to have been referring to ABSD.

ABSD generally affects property investors more than first-time home buyers, since Singaporeans do not have to pay ABSD on their first home purchase and incur a 7 per cent ABSD when buying a second home.

The extent of any hypothetical rebound in demand from the lifting of ABSD is unclear. When policymakers introduced ABSD in 2011 in a bid to rein in surging home prices, the subsequent dip in demand for homes here turned out to be short-lived, with buyers continuing to jump into the market.

The ABSD was raised again in early 2013, but that did not prevent home prices from rising. Prices only started to fall noticeably after the implementation of a total debt servicing ratio (TDSR) in mid-2013.

Home values in Singapore have dropped about 8.4 per cent from their peak in Q3 2013, official figures show.

This article was first published on March 1, 2016.
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