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PROPERTY MEASURES

Developers say: Mass-market and luxury homes 'will all be hit'

Published on Dec 8, 2011

By Magdalen Ng


THE measures announced yesterday will hit developers aiming for the luxury market but mass-market builders will not escape either, said analysts.

High-end developers such as SC Global and Wing Tai could see demand slip as foreigners, who generally account for more than half of the sales in the upper-price brackets, will be hit by the additional 10 per cent stamp duty.

This is over and above the existing buyer's stamp duty of 3 per cent.

Independent research firm Sabio Global director Alan Lok said: 'Traditionally, the Chinese buyers come here because Singapore is considerably cheaper than Hong Kong, but a stamp duty of 13 per cent is quite drastic.

'This will definitely make them (foreign buyers) think twice about buying property here.'

The mass market will also feel the impact as Chinese buyers have been steadily moving into the suburbs so the stamp duty levy is likely to cool their buying.

While a decline in demand is almost certain, analysts and developers believe the measures will not do much to dampen property prices given that land is still pricey and construction costs are rising.

Property developer Roxy-Pacific executive chairman and chief executive Teo Hong Lim said: 'Well, it doesn't mean that just because sales are slow, we have to sell at a loss, right? We still have to break even.'

However, he does not think that the measures will affect his business very much as 50 per cent of his pipeline is made up of commercial - mainly retail and office - units.

He also added that foreign buyers only make up about 10 per cent of his clientele on average.

Mr Wong Heang Fine, chief executive of CapitaLand Residential Singapore, said: 'Given the uncertainty in current market outlook, the latest measures on additional buyer's stamp duty were unexpected. We will study the details and take them into consideration.'

While share prices of all developers are likely to slide today, Kim Eng analyst Wilson Liew believes the impact will not be that great for those with a more diversified business model.

'There will be weakness in the short term, but Capitaland for example has significant businesses in China, and that will be a buffer for them even if their Singapore business is affected,' he added.