Many analysts are calling the adjustments to cooling measures mild, and that they will not result in major changes in the property market.
Here's a counter-analysis.
Before we begin, you should note that every analyst has a private agenda, myself included. Whether that agenda is selfish or noble is a separate discussion. Some analysts want to buy cheap or buy more, some want to push for transactional numbers but do not care whether prices go up or down, some wants to sell high (nobody I know really), and some just love flowery language. But with that disclaimer out of the way, here goes my thoughts.
One of the blind spots analysts have so far failed to consider is the impact of the various loosening measures on foreign buyers.
The 2016 foreign buyers segment should total about 1,000 and is set to rise more in 2017.
With the marginal actions taken to signal the base price level for which SG Govt is comfortable with, the signal sent out externally is that foreign buyers and current foreign owners will be well buffered from further steep falls in whichever segment they are in, and the results are most notable in the gain in prices for resales for CCR segment, a segment which many foreign buyers tend to prefer. And RCR / OCR will also follow wherever CCR goes, no doubt about that.
The main revisions were to TDSR (twice) and SSD (once). The TDSR revisions not only exempted all owners from TDSR at refinancing, they also allowed all owners to engage in mortgage equity loans if required. Not only did this have an impact on the supply of resales properties (repossession and forced sales by banks), it also provided reassurance to existing and new (foreign included) buyers that proof of income is not required at refinancing. Together with the shortening of SSD-imposing period, the ecosystem is now much more friendly for a foreign affluent buyer (maybe with the full sum to pay up already) buying to stay or to invest.
The 2013-2017 window has served as a clear timeframe reserving private properties for upper-middle class Singaporeans who felt they were priced out in the run up of property from 2009 to 2013. All the CMs set up in the period served primarily to deter foreigners.
What is the base level of "foreigner" purchase?
"The number of ABSD transactions by foreigners was 1,149 last year (2014), down from 1,980 in 2013 and 2,432 in 2012, according to the Inland Revenue Authority of Singapore."
How high can foreign participation go?
"The proportion of purchases made by foreigners in Q2 2011 was similar to the 16% recorded in Q1 2011. In absolute terms, foreign purchases were 1,327 in Q2 2011, below the record high of 1,741 foreign purchases in Q2 2007. With the exception of one landed home in Sentosa Cove, the rest of the transactions by foreigners were for non-landed homes.
Among non-Singaporean buyers which comprise foreigners and Permanent Residents, mainland Chinese buyers were the top non-Singaporean purchasers of residential properties in Singapore for the second consecutive quarter. They made up 26% of purchases by non-Singaporeans in Q2 2011, buying 640 units, which is a new high and more than the 527 units purchased in Q1 2011."
According to our bargain thread on CCR properties, some CCR properties had been down by 30% or so by 2016. The ABSD served on foreigners' first and subsequent purchase (15%) now seemed relatively small in relation to the price drops. Moreover, there are some countries that are exempt from ABSD - although their home country property prices are nowhere near SG prices, there will be some that will commit having understood Asian mentalities about properties.
At the same time, we did see huge run up in property prices everywhere else in the world - HK, major cities in China, Australia etc etc (some few hundred %), at a time our prices fell by 11.2% overall.
With the recent tweaks in the CMs, the clear signal is that enough has been done to pull back prices and allowing qualified Singaporeans to purchase properties (some with ABSD). The groups that we will be welcoming back are the foreign buyers that qualify (some having to pay taxes to support our revenue starved Government).