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03-01-12, 17:39
http://www.businesstimes.com.sg/sub/news/story/0,4574,471538-1325188740,00.html?
Published December 29, 2011
How long will ABSD stay in the market?
Remark about 'short-term' step gets an airing
By MINDY TAN
(SINGAPORE) The president of the Real Estate Developers' Association of Singapore raised eyebrows on Tuesday by asserting that the latest cooling measures were likely to be short-term in nature.
Yesterday, many consultants and industry players agreed with Wong Heang Fine's assessment.
'After the measures have been implemented long enough for it to be efficient, the government would most likely review it, in accordance to market conditions, especially in 2012,' said Ong Kah Seng, director of R'ST Research.
The measures, which came into effect on Dec 8, include the Additional Buyer's Stamp Duty (ABSD) of 10 per cent on foreigners' home purchases, and require developers to build and sell all units in their projects within five years, or pay a stamp duty of 10 per cent.
The measures were a 'targeted and measured move to moderate investment demand (from overseas) in order to avoid the need for a major correction down the road' said Tan Chuan-Jin, Minister of State for National Development and Manpower at the 52nd Redas anniversary dinner on Tuesday.
Lee Sze Teck, senior manager of research and consultancy at Dennis Wee Group, agreed with Mr Wong that the ABSD was likely to be a short-term strategy, but could be in place for a few years yet.
'Looking at how our government has implemented policies in the past, it is unlikely to be short term in the sense of a few months. We could be looking at a few years,' he said.
If the government intended for stamp duty to be a long-term measure, it would have adjusted the buyers stamp duty rate, instead of imposing an additional stamp duty, he added.
'This way, they have the liberty to suspend it, withdraw it, and do whatever changes they want.'
Credo Real Estate executive director Ong Teck Hui, noted that the longevity of the measures would largely depend on foreign demand.
'Whether the ABSD is seen as a short or long-term measure depends on the trend of foreign buying,' said Mr Ong. 'If China and India continue to do well with more of their citizens investing overseas in the longer term, including Singapore, then this may not be seen as a short-term trend.'
'While policymakers could review and lift the ABSD if foreign demand slackens, they would still keep their eye on the ball and reintroduce the measures if foreign demand comes back strongly,' he added.
Knight Frank chairman, Tan Tiong Cheng said: 'There is expectation from buyers that residential prices will ease following the latest measures . . . With the amount of liquidity in the market, any fall of 10 per cent should attract buying again, which would help to stabilise the market.
'In that sense, a 30 per cent fall is less likely unless there is global recession, then the government would then step in to review all the measures.'
He concluded: 'I am sure the government will tweak it if it is not achieving the original objective of a stable, affordable property market.'
Published December 29, 2011
How long will ABSD stay in the market?
Remark about 'short-term' step gets an airing
By MINDY TAN
(SINGAPORE) The president of the Real Estate Developers' Association of Singapore raised eyebrows on Tuesday by asserting that the latest cooling measures were likely to be short-term in nature.
Yesterday, many consultants and industry players agreed with Wong Heang Fine's assessment.
'After the measures have been implemented long enough for it to be efficient, the government would most likely review it, in accordance to market conditions, especially in 2012,' said Ong Kah Seng, director of R'ST Research.
The measures, which came into effect on Dec 8, include the Additional Buyer's Stamp Duty (ABSD) of 10 per cent on foreigners' home purchases, and require developers to build and sell all units in their projects within five years, or pay a stamp duty of 10 per cent.
The measures were a 'targeted and measured move to moderate investment demand (from overseas) in order to avoid the need for a major correction down the road' said Tan Chuan-Jin, Minister of State for National Development and Manpower at the 52nd Redas anniversary dinner on Tuesday.
Lee Sze Teck, senior manager of research and consultancy at Dennis Wee Group, agreed with Mr Wong that the ABSD was likely to be a short-term strategy, but could be in place for a few years yet.
'Looking at how our government has implemented policies in the past, it is unlikely to be short term in the sense of a few months. We could be looking at a few years,' he said.
If the government intended for stamp duty to be a long-term measure, it would have adjusted the buyers stamp duty rate, instead of imposing an additional stamp duty, he added.
'This way, they have the liberty to suspend it, withdraw it, and do whatever changes they want.'
Credo Real Estate executive director Ong Teck Hui, noted that the longevity of the measures would largely depend on foreign demand.
'Whether the ABSD is seen as a short or long-term measure depends on the trend of foreign buying,' said Mr Ong. 'If China and India continue to do well with more of their citizens investing overseas in the longer term, including Singapore, then this may not be seen as a short-term trend.'
'While policymakers could review and lift the ABSD if foreign demand slackens, they would still keep their eye on the ball and reintroduce the measures if foreign demand comes back strongly,' he added.
Knight Frank chairman, Tan Tiong Cheng said: 'There is expectation from buyers that residential prices will ease following the latest measures . . . With the amount of liquidity in the market, any fall of 10 per cent should attract buying again, which would help to stabilise the market.
'In that sense, a 30 per cent fall is less likely unless there is global recession, then the government would then step in to review all the measures.'
He concluded: 'I am sure the government will tweak it if it is not achieving the original objective of a stable, affordable property market.'