Singapore Property | Private housing prices have steadily risen over the past year with the increase now at 9.1%. Transactions have been on the upside as well and the real estate industry is generally becoming a force in terms of demands.
However, this is not necessarily beneficial with worries continuing to rise as well regarding the unchecked power of the industry that may run over the economic fundamentals of the country and cause a destabilization. This is according to the joint statement released by the concerned agencies of Singapore.
In an attempt to “cool the property marker and keep prince increases in line with economic fundamentals,” the government raised the Additional Buyer's Stamp duty or ABSD rates on 6th July 2018. Still working on the same principle, Loan-to-Value or LTV limits on residential purchases were also tightened up a bit.
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This move was well anticipated by experts but not as soon and swift as the current timeline of developments.
ABSD rates for permanent residents and Singaporean citizens will still be at zero to five percent for their first residential property. On the other hand, individuals who do not meet the said profile such as those buying a second property will have an increase of 5 percent for citizens and 10 for permanent residents.
Meanwhile, LTV limits were tightened by 5 percent points and this applies on all housing loans offered by institutions.
PropertyGuru' Lewis Ng states that this move by the government will slow down the recovery of private property.
The ABSD rates revision is mostly likely predicted to likely to lead to a slow paced motion in the recovery of private property national market that was seen to be a quarter-on-quarter improvement of 3.4 per cent found in the second quarter of the said year according to Ng.