The Real Estate Developers’ Association of Singapore (REDAS) sees no rationale in imposing new property cooling measures considering that the Singapore property market is still in the “early stages of a recovery and the recovery is in line with economic fundamentals”, reported Channel News Asia.
Among the new curbs imposed by the government are a five percentage point increase in Additional Buyer’s Stamp Duty (ABSD) rates for Singapore citizens and permanent residents (PRs) purchasing their second homes and a five percentage point tightening for loan-to-value (LTV) limits for all residential property loans granted by financial institutions.
REDAS noted that Singapore’s property market began to see improved sentiments last year, on the back of brighter economic forecasts. The Singapore economy grew 3.5 percent by end-2017 and 4.4 percent during the first quarter of 2018.
Nonetheless, the sale transaction volume is not high and remained within market expectation given that the property market had been in the doldrums since 2013, it said.
This comes as buyers remained price-sensitive as the existing sizable ABSD (Additional Buyer’s Stamp Duty) and TDSR (Total Debt Servicing Ratio) continued to restrain foreign buyers and Singaporeans.
With this, the industry body feels that the property market “should be allowed time to find its own course and reach a sustained equilibrium”.
REDAS does not also see the need to impose additional measures on developers.
“As is, in the purchase of sites from the GLS (Government Land Sales) programme or private collective sites to replenish their land bank to keep operations going, developers are constrained by a confluence of financial considerations as well as tough and unfriendly business policies including the existing ABSD on developers and the Qualifying Certificate (QC) punitive conditions on majority of developers (who are deemed foreign companies),” it said.
“It is in the interest of the country to have a vibrant real estate industry and a steady growth in real estate value for home owners and investors in the long term.”