See what analysts had to say.
The market has cooled considerably since 2011 but much to the real estate community's dismay, the property cooling measures introduced previously to stabilise the property market were not removed or at least tweaked in the recent Budget announcement.
Here's what analysts had to say:
Tay Huey Ying, analyst, JLL:
The lack of property-related measures in Budget 2016 came as no surprise given that most property sectors are at the early stages of consolidation and any interference at this juncture would be too premature.
As for the residential market, absence of changes to market cooling measures is also expected as the Government has conveyed its concern that premature easing of market cooling measures might lead to a market rebound.
Whilst there are no property-specific measures in Budget 2016, given that demand for real estate is a derived demand, the plethora of measures aimed at helping companies and individuals ride through the expected economic slowdown should help prop up demand for real estate and cushion the office, retail and industrial markets against a hard landing amid a backdrop of a challenging economy.
Low Hwee Chua (刘辉泉), Head of Tax Services, Deloitte Singapore and Southeast Asia:
“As hinted by various Government officials, the Finance Minister has confirmed that it is too early to relax the current property cooling measures. It is a double whammy for property developers as manpower costs will increase due to the non-deferment of the previously announced increase in foreign worker levies for the construction industry.”
Christine Li, Research Director, Cushman & Wakefield
As expected, the property cooling measures are not lifted. This did not come as a surprise. The residential transaction volume has been halved since the implementation of the Total Debt Servicing Ratio (TDSR) framework in 2013 and there is “frustrated demand” in the market as buyers are deterred from entering the market due to the additional buyer’s stamp duty (ABSD).
As a result, a pre-mature lifting of the cooling measures, particularly the ABSD, could result in buyers rushing into the market for fear that property price may rise due to increased demand.
Given that the only beneficiaries of the lifting of the cooling measures such as tweaking the ABSD will be property developers, Singaporeans who can afford a second property (as ABSD does not apply to first time buyers), permanent residents and foreigners, it does not serve the interest of the masses as having these measures in place will help to keep prices affordable.
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