How long will ABSD stay in the market?

[reporter2]

http://www.businesstimes.com.sg/sub/...88740,00.html?

Published December 29, 2011

How long will ABSD stay in the market?

Remark about 'short-term' step gets an airing

By MINDY TAN


(SINGAPORE) The president of the Real Estate Developers' Association of Singapore raised eyebrows on Tuesday by asserting that the latest cooling measures were likely to be short-term in nature.

Yesterday, many consultants and industry players agreed with Wong Heang Fine's assessment.

'After the measures have been implemented long enough for it to be efficient, the government would most likely review it, in accordance to market conditions, especially in 2012,' said Ong Kah Seng, director of R'ST Research.

The measures, which came into effect on Dec 8, include the Additional Buyer's Stamp Duty (ABSD) of 10 per cent on foreigners' home purchases, and require developers to build and sell all units in their projects within five years, or pay a stamp duty of 10 per cent.

The measures were a 'targeted and measured move to moderate investment demand (from overseas) in order to avoid the need for a major correction down the road' said Tan Chuan-Jin, Minister of State for National Development and Manpower at the 52nd Redas anniversary dinner on Tuesday.

Lee Sze Teck, senior manager of research and consultancy at Dennis Wee Group, agreed with Mr Wong that the ABSD was likely to be a short-term strategy, but could be in place for a few years yet.

'Looking at how our government has implemented policies in the past, it is unlikely to be short term in the sense of a few months. We could be looking at a few years,' he said.

If the government intended for stamp duty to be a long-term measure, it would have adjusted the buyers stamp duty rate, instead of imposing an additional stamp duty, he added.

'This way, they have the liberty to suspend it, withdraw it, and do whatever changes they want.'

Credo Real Estate executive director Ong Teck Hui, noted that the longevity of the measures would largely depend on foreign demand.

'Whether the ABSD is seen as a short or long-term measure depends on the trend of foreign buying,' said Mr Ong. 'If China and India continue to do well with more of their citizens investing overseas in the longer term, including Singapore, then this may not be seen as a short-term trend.'

'While policymakers could review and lift the ABSD if foreign demand slackens, they would still keep their eye on the ball and reintroduce the measures if foreign demand comes back strongly,' he added.

Knight Frank chairman, Tan Tiong Cheng said: 'There is expectation from buyers that residential prices will ease following the latest measures . . . With the amount of liquidity in the market, any fall of 10 per cent should attract buying again, which would help to stabilise the market.

'In that sense, a 30 per cent fall is less likely unless there is global recession, then the government would then step in to review all the measures.'

He concluded: 'I am sure the government will tweak it if it is not achieving the original objective of a stable, affordable property market.'

[TMATT]

In short - CM6 to CM10 already prepare.
Now just waiting to see monthly Private Condo Sale figure and price?

Looking at recent two project at Sembawang & Hillview, maybe possible to reach 1000 condo unit per month again. More so with the Punggol Watertown project which will be very popular, as the shopping mall,MRT, Town Council, Seletar Airhub are the best selling point.
It is an Art to balance the property market...

[reporter2]

http://www.straitstimes.com/PrimeNew...ry_749673.html

New property rules may go if economy worsens: Analysts

But buyers should expect measures to stay if home prices keep rising

Published on Dec 29, 2011

By Yasmine Yahya


ANALYSTS say the latest round of property cooling measures is unlikely to be a permanent feature in Singapore if the property market grinds to a standstill amid the upcoming economic downturn.

But if home prices continue surging despite the new rules, buyers can expect that the measures will stay.

Developers have been sounding the alarm bell since the new rules were announced, saying that they could drive down home values, turn away foreign investment, and thus potentially damage an already fragile economy.

At Tuesday's Real Estate Developers Association of Singapore's 52nd anniversary dinner, president Wong Heang Fine warned of a knock-on effect on mortgages resulting in a possible decline in home equity values and, consequently, shrinking wealth, he said.

The Government has argued that the measures, which include an additional buyer's stamp duty of 10 per cent on foreigners buying homes, are necessary to maintain a sustainable property market.

At the dinner, Minister of State for National Development Tan Chuan-Jin said he did not expect developers to welcome the measures, but that given the volatile equity markets and a worsening economic situation, 'our small property market is attractive to foreign funds'. The moves are meant 'to moderate such investment demand in order to avoid the need for a major correction down the road.'

The outspoken views from the property developers have raised questions if the measures are here to stay.

Bank of America Merrill Lynch economist Chua Hak Bin has said that the new stamp duty could be permanent, as it is a political step in line with the Government's aim to differentiate the privileges and rights of Singaporeans, permanent residents and foreigners.

But property consultants reckon that if the property market turns south too rapidly, the Government will look to remove the new rules.

'While the recent measures may seem to be more political rather than economic, I believe the Government... will relax the measures if the economic situation worsens significantly,' said Mr Png Poh Soon, Knight Frank's head of research and consultancy.

'After all, it would not be politically acceptable if the property market comes down and people start blaming the Government for all the cooling measures which may have triggered or further exacerbated the downturn.'

Typically, property cooling measures last for an average of two to 2-1/2 years, Mr Png said. Most of the time, such measures are removed due to a sharp slowdown in Singapore's economic performance.

Associate Professor Sing Tien Foo of the National University of Singapore's department of real estate agreed that the measures will likely be removed if the property market slows down too much.

However, if prices continue to rise in the face of these tightening measures, the new rules will likely remain in place, he added, as measures targeting the private market are likely to have a trickle-down effect on the public market.

'I think the Government's main concern is more on public housing. It has to make sure that public housing remains affordable, but the private and public markets are quite integrated in Singapore,' he said.

Some local investors have welcomed the latest measures. One home buyer, who declined to be named, recently bought a property in the East Coast, and said she was happy about the new rules because she felt it 'levels the playing field' for local buyers.

She said: 'When I was house-hunting, there were several foreigners viewing the same properties, and they have the buying power. At least now we don't have to compete with them.'

[email protected]