http://www.businesstimes.com.sg/arch...ayers-20140813

Published August 13, 2014

NATIONAL REAL ESTATE CONGRESS

Time to review cooling steps, say property players

Participants urge caution while buying overseas assets

By Lynette Khoo

[email protected] @LynetteKhooBT


EVEN though the government has reiterated that it is not yet time to lift the property cooling measures, some real estate consultants are calling for a review of the earlier taxes imposed to rein in speculators, which they claim have an inflationary effect.

Consultants felt that with the implementation of total debt servicing ratio (TDSR) to cap total borrowings at 60 per cent of gross monthly income, the additional buyer's stamp duty (ABSD) and the seller's stamp duty (SSD) have become less relevant.

Speaking at the National Real Estate Congress yesterday, Colliers International managing director Dennis Yeo advocated that the ABSD be lifted for Singapore citizens and the SSD to be scrapped.

"Nobody would question the reason behind the TDSR. But now with TDSR being in place for slightly over a year now, we then have to look at all the other earlier measures that were put in place to see whether they were conflicting or inflationary," he said. "We do not want prices to go out of control, but transaction costs add on to the price of the property."

ERA Realty key executive officer Eugene Lim, another speaker, felt that it was "safe to remove SSD now" given that sub-sales, which serve as an indication of speculative activity, are low across all property types. Currently, the SSD kicks in if a residential property is sold within four years of acquisition.

"Perhaps, it is an opportune time to review the measures that were implemented to tackle speculative buying and selling and whether the holding period under SSD is necessary at this point now," he added.

While acknowledging that economists have flagged ample Asian liquidity waiting to enter the market, Mr Lim felt that the ABSD, while imposing a higher tax on foreigners, still penalises Singaporeans who wish to own a property for owner-occupation and another for investment.

Sing Tien Foo, deputy head of the department of real estate at the National University of Singapore, also touched on the government's supply-side policy. He noted that the impact of the ramp-up in residential supply - be it on prices or buyers' behaviour - is "yet to be fully understood at this moment".

Given that it has become more costly to buy properties in Singapore, consultants said that there is greater interest than before in overseas properties among Singaporeans.

OrangeTee head of international projects Johnny Chng noted that the Philippines is popular among emerging markets, given the capital appreciation of some 10-20 per cent each year on the back of strong economic recovery. But he cautioned that investors looking to emerging markets should bear in mind the political risks, the taxation costs and the legal framework.

Consumers Association of Singapore (Case) executive director Seah Seng Choon said that he had once come across an advertisement on the Internet touting returns of 100 per cent for an overseas property. He urged real estate agents not to "over-sell" or confuse buyers where overseas properties are concerned.