reporter2
03-01-12, 17:23
http://www.businesstimes.com.sg/sub/news/story/0,4574,471302-1325015940,00.html?
Published December 27, 2011
Redas, industry studying cooling measures: sources
Suggestions also being raised, some may be presented to the authorities
By UMA SHANKARI
(SINGAPORE) The Real Estate Developers' Association of Singapore (Redas) has been holding a series of meetings with industry players to look into the impact of the latest round of property curbs, sources told BT.
According to the sources, meetings were held recently with stakeholders such as developers, property consultants, brokerage analysts and lawyers.
They discussed the intended objectives of the cooling measures - which include an additional buyer's stamp duty (ABSD) of 10 per cent for foreigners - as well as the likely consequences.
BT understands that several suggestions for a more 'calibrated' approach were also raised at the meetings. Some of those proposals, which are still being explored and fine-tuned, could eventually be tabled and presented to the authorities, sources said.
One idea floated was to identify 'hot spots' for foreign investments according to postal district codes, and then apply tiered stamp duties.
According to a recent CBRE analysis of URA's caveat data lodged from January 2011 to November 2011, almost 29 per cent of private homes in the core central region - which includes the prime districts 9, 10 and 11, Marina Bay and Sentosa Cove - were purchased by foreigners.
By contrast, the foreigners' share was only just over 14 per cent in the outside central region, which is a proxy for suburban mass market locations.
Industry players also suggested that instead of singling out foreigners to bear heavier taxes, the authorities could give more incentives to support Singapore citizens and Permanent Residents (PRs). One proposal was to provide more generous subsidies for first-time homebuyers.
Under the latest round of measures announced on Dec 7, foreigners and corporations have to pay an ABSD of 10 per cent - on top of the existing buyer's stamp duty of up to 3 per cent.
The new duty will also apply to PRs buying their second or subsequent homes and Singaporeans buying their third residential property or more - though only to the tune of 3 per cent.
Those at the meetings noted that foreign buyers have not significantly contributed to the increase in mass market home prices.
Based on a list collated by Redas ahead of the meetings, foreigners had a strong presence in only three out of 33 selected projects launched recently.
At least 50 per cent of the units in the three projects, all of which are targeted at mid to high-end buyers, were sold to foreigners, PRs and corporations. And only one project had more than 50 per cent of units sold purely to foreigners.
Industry players also noted that the new measures do not address the rising prices of resale HDB flats - which are thought to underpin the demand for mass market private homes and the subsequent price surge in that segment.
Analysts are split over whether the ABSD is here to stay. CBRE's executive director for residential, Joseph Tan, thinks that the duty is not likely to be around forever.
'We are of the opinion that these measures are unlikely to be a permanent feature because of the nature of Singapore's highly open economy,' he said in a recent report.
But Chua Hak Bin, an economist with Bank of America Merrill Lynch, said the government is shifting to a 'Singaporeans first' policy, and that the differentiated buyer's stamp duty may therefore become a permanent fixture.
'The differentiated buyer's stamp duty may remain even after property markets cool, as the government moves towards differentiating the privileges and rights of Singaporeans, permanent residents and foreigners,' Dr Chua said in a Dec 15 note.
Any relaxation would likely occur by way of loan-to-value (LTV) ratios or the seller's stamp duty, he added.
When the measures were announced, the Ministry of Finance and the Ministry of National Development said that they were introduced to moderate investment demand for private homes and promote a more stable and sustainable market.
But industry players have speculated that in addition, the government could have unstated intentions such as lowering the cost of living, implementing a 'Singaporeans first' policy, and managing foreign investments into Singapore.
Published December 27, 2011
Redas, industry studying cooling measures: sources
Suggestions also being raised, some may be presented to the authorities
By UMA SHANKARI
(SINGAPORE) The Real Estate Developers' Association of Singapore (Redas) has been holding a series of meetings with industry players to look into the impact of the latest round of property curbs, sources told BT.
According to the sources, meetings were held recently with stakeholders such as developers, property consultants, brokerage analysts and lawyers.
They discussed the intended objectives of the cooling measures - which include an additional buyer's stamp duty (ABSD) of 10 per cent for foreigners - as well as the likely consequences.
BT understands that several suggestions for a more 'calibrated' approach were also raised at the meetings. Some of those proposals, which are still being explored and fine-tuned, could eventually be tabled and presented to the authorities, sources said.
One idea floated was to identify 'hot spots' for foreign investments according to postal district codes, and then apply tiered stamp duties.
According to a recent CBRE analysis of URA's caveat data lodged from January 2011 to November 2011, almost 29 per cent of private homes in the core central region - which includes the prime districts 9, 10 and 11, Marina Bay and Sentosa Cove - were purchased by foreigners.
By contrast, the foreigners' share was only just over 14 per cent in the outside central region, which is a proxy for suburban mass market locations.
Industry players also suggested that instead of singling out foreigners to bear heavier taxes, the authorities could give more incentives to support Singapore citizens and Permanent Residents (PRs). One proposal was to provide more generous subsidies for first-time homebuyers.
Under the latest round of measures announced on Dec 7, foreigners and corporations have to pay an ABSD of 10 per cent - on top of the existing buyer's stamp duty of up to 3 per cent.
The new duty will also apply to PRs buying their second or subsequent homes and Singaporeans buying their third residential property or more - though only to the tune of 3 per cent.
Those at the meetings noted that foreign buyers have not significantly contributed to the increase in mass market home prices.
Based on a list collated by Redas ahead of the meetings, foreigners had a strong presence in only three out of 33 selected projects launched recently.
At least 50 per cent of the units in the three projects, all of which are targeted at mid to high-end buyers, were sold to foreigners, PRs and corporations. And only one project had more than 50 per cent of units sold purely to foreigners.
Industry players also noted that the new measures do not address the rising prices of resale HDB flats - which are thought to underpin the demand for mass market private homes and the subsequent price surge in that segment.
Analysts are split over whether the ABSD is here to stay. CBRE's executive director for residential, Joseph Tan, thinks that the duty is not likely to be around forever.
'We are of the opinion that these measures are unlikely to be a permanent feature because of the nature of Singapore's highly open economy,' he said in a recent report.
But Chua Hak Bin, an economist with Bank of America Merrill Lynch, said the government is shifting to a 'Singaporeans first' policy, and that the differentiated buyer's stamp duty may therefore become a permanent fixture.
'The differentiated buyer's stamp duty may remain even after property markets cool, as the government moves towards differentiating the privileges and rights of Singaporeans, permanent residents and foreigners,' Dr Chua said in a Dec 15 note.
Any relaxation would likely occur by way of loan-to-value (LTV) ratios or the seller's stamp duty, he added.
When the measures were announced, the Ministry of Finance and the Ministry of National Development said that they were introduced to moderate investment demand for private homes and promote a more stable and sustainable market.
But industry players have speculated that in addition, the government could have unstated intentions such as lowering the cost of living, implementing a 'Singaporeans first' policy, and managing foreign investments into Singapore.