Marginal impact on the transaction volumes and prices?

IN what was a largely unexpected move, the Singapore government announced on Friday that the Seller’s Stamp Duty (SSD) for residential properties in the city-state would be relaxed for the first time since 2009 when it imposed its property cooling measures.

The government targeted “calibrated adjustments to the Seller’s Stamp Duty (SSD) and Total Debt Servicing Ratio (TDSR) framework, with effect from March 11, 2017. Upcoming executive condo launches include Hundred Palms Residences EC, Yio Chu Kang EC, Inz Residence EC, Anchorvale Lane EC,  while existing ones include The Terrace EC, Brownstone EC, The Vales EC, Parc Life , Sol Acres EC, The Visionaire, Bellewoods EC, Signature at Yishun, The Criterion EC and Northwave. Hundred Palms Residences , Hundred Palms floor plans and Hundred Palms EC show flat will be available shortly.

Here are some analysts’ comments:

Alvin Liew, analyst at UOB:

“With the first easing (since 2009), there is now greater anticipation for more easing to follow. The Singapore private property prices has been on a cushioned decline in the last three years, an outcome that is likely in line with what the government has set out to achieve 8 years ago. We continue to believe that the government will remain steadfast to its property market measures unless there are 2 significant changes in the environment: 1) sharply higher interest rates and 2) surge in domestic unemployment.

“We continue to see conducive macro-economic conditions underpinning the Singapore property market and we believe that only if we see markedly higher interest rates and/or a surge in domestic unemployment, then the government may ease the more restrictive property cooling measures.”

Christine Li, research director at Cushman and Wakefield:

“Overall, the easing of the property cooling measures is rather targeted and will only have very marginal impact on the transaction volumes and prices. It is also not a pre-cursor to any further lifting of the measures in the near future. In fact, what can hurt the market more is the fact that the government may impose stamp duties (including 3 per cent buyer stamp duty, 15 per cent ABSD and SSD) to the bulk sales through share transfer as announced earlier in the week. So the tweaking can be seen as “neutralising the impact” the former announcement.

“Hence, we expect the overall impact to the residential market to be rather muted, as today’s easing is just a minor tweak to help certain groups who are adversely affected by the cooling measures. Nevertheless, it does send a clear signal to the market that the government is definitely inclined to have a “soft landing” for the housing market, which is good for the overall stability of the housing market over the medium to long run.”

Ismail Gafoor, CEO of PropNex Realty:

“It is a positive news, as most property buyers are taking a mid to long term view of their property investment. By reducing the 4 year to 3 year Sellers’ Stamp Duty may not have any significant impact on transaction volume as there are minimal speculative activities.

“This 60 per cent TDSR threshold will no longer apply to mortgage equity withdrawal loans with loan-to-value ratios of 50 per cent and below. These refer to loans where borrowers borrow against the value of their properties to obtain more cash. This move is expected to affect only a small group of owners though.

“We feel that changes to the TDSR framework will help homeowners to monetise their properties in their retirement years.”

waterwoods ec executive condo site photo 1