Budget 2016: Double whammy for property developers

[reporter2]

http://news.asiaone.com/news/busines...rty-developers

Budget 2016: Double whammy for property developers


SINGAPORE'S Finance Minister, Heng Swee Keat, told Parliament on Thursday that it is too premature to relax property cooling measures given the price level and current market conditions.

"We will continue to monitor developments in the property market closely," Mr Heng said in his Budget 2016 speech.

Here are some comments:

Low Hwee Chua, Head of Tax Services, Deloitte Singapore and Southeast Asia:

"As hinted by various Government officials, the Finance Minister has confirmed that it is too early to relax the current property cooling measures."

"It is a double whammy for property developers as manpower costs will increase due to the non-deferment of the previously announced increase in foreign worker levies for the construction industry."

Christine Li, director and head of research at Cushman & Wakefield:

"As expected, the property cooling measures are not lifted. This did not come as a surprise."

"The residential transaction volume has been halved since the implementation of the Total Debt Servicing Ratio (TDSR) framework in 2013 and there is "frustrated demand" in the market as buyers are deterred from entering the market due to the additional buyer's stamp duty (ABSD)."

"As a result, a pre-mature lifting of the cooling measures, particularly the ABSD, could result in buyers rushing into the market for fear that property price may rise due to increased demand."

"Given that the only beneficiaries of the lifting of the cooling measures such as tweaking the ABSD will be property developers, Singaporeans who can afford a second property (as ABSD does not apply to first time buyers), permanent residents and foreigners, it does not serve the interest of the masses as having these measures in place will help to keep prices affordable."

[DC33_2008]

Besides the dropping of volume and price, they are monitoring the level of bank sale and unemployment rate. May see something in late 2017 or early 2018.

http://news.asiaone.com/news/busines...rty-developers

Budget 2016: Double whammy for property developers


SINGAPORE'S Finance Minister, Heng Swee Keat, told Parliament on Thursday that it is too premature to relax property cooling measures given the price level and current market conditions.

"We will continue to monitor developments in the property market closely," Mr Heng said in his Budget 2016 speech.

Here are some comments:

Low Hwee Chua, Head of Tax Services, Deloitte Singapore and Southeast Asia:

"As hinted by various Government officials, the Finance Minister has confirmed that it is too early to relax the current property cooling measures."

"It is a double whammy for property developers as manpower costs will increase due to the non-deferment of the previously announced increase in foreign worker levies for the construction industry."

Christine Li, director and head of research at Cushman & Wakefield:

"As expected, the property cooling measures are not lifted. This did not come as a surprise."

"The residential transaction volume has been halved since the implementation of the Total Debt Servicing Ratio (TDSR) framework in 2013 and there is "frustrated demand" in the market as buyers are deterred from entering the market due to the additional buyer's stamp duty (ABSD)."

"As a result, a pre-mature lifting of the cooling measures, particularly the ABSD, could result in buyers rushing into the market for fear that property price may rise due to increased demand."

"Given that the only beneficiaries of the lifting of the cooling measures such as tweaking the ABSD will be property developers, Singaporeans who can afford a second property (as ABSD does not apply to first time buyers), permanent residents and foreigners, it does not serve the interest of the masses as having these measures in place will help to keep prices affordable."

[Kelonguni]

The truth is every expenditure in the budget has increased.

Where will the tax come from?

Developers and future private property owners with guaranteed income levels, especially future multiple property owners!

Besides the dropping of volume and price, they are monitoring the level of bank sale and unemployment rate. May see something in late 2017 or early 2018.

[Kelonguni]

I also thought about it for a long time, why tdsr was the last measure when it was obvious to me it would easily stall prices if it were the first measure.

There may be two reasons. One is the prevention of only the really cash rich in hoarding many properties. The second is for prices to go up to a much higher level so it is possible to make room for the taxes.

[DC33_2008]

They have already allowed the rich to widen the gap from the middle income group between 2008 till 2 years ago with the rich leveraging on cheap money. It is time to give something to the middle income group. The lower income group has always been given via social benefits, etc.

I also thought about it for a long time, why tdsr was the last measure when it was obvious to me it would easily stall prices if it were the first measure.

There may be two reasons. One is the prevention of only the really cash rich in hoarding many properties. The second is for prices to go up to a much higher level so it is possible to make room for the taxes.

[DC33_2008]

I was told from people in the inner circle that cooling measure will not be lifted so soon unless there are adverse global and local issues. You can see so many of our developers have aleady gone abroad or diversify.

[Kelonguni]

They have already allowed the rich to widen the gap from the middle income group between 2008 till 2 years ago with the rich leveraging on cheap money. It is time to give something to the middle income group. The lower income group has always been given via social benefits, etc.

It depends on how you define middle income.

If for first property, there might indeed be a slight discount. But multiple property owners (likely have to be regarded as the rich) will be very much thwarted with additional taxes.

[DC33_2008]

Use median household income as a guide. The additional taxes for those top 5% household income who owns several properties will not be so badly affected.

It depends on how you define middle income.

If for first property, there might indeed be a slight discount. But multiple property owners (likely have to be regarded as the rich) will be very much thwarted with additional taxes.

[Arcachon]

Just finish my Tax return, nowaday 15% off your rental income no more headache how to plus plus to made the income lower.

Singapore government very good, can think on your behalf no wonder call nanny state.

[indomie]

I tend to agree that middle income folks are being propped up. Money are being spend on heartland infrastuctures. So far OCR prices is holding up.

Why middle incomers? Tax base is moving away from upper class to middle class. As the world is moving toward "sharing economy" pioneered by the like of airbnb, ubertaxi, alibaba, leading the demise of big corporations. Now everybody can run hotel, run transportation business, sell online.

[Kelonguni]

I only meant future multiple property owners.

Current owners everything is cast in stone so not really affected.

Use median household income as a guide. The additional taxes for those top 5% household income who owns several properties will not be so badly affected.

[Kelonguni]

And if you scrutinize the tax bill, there are actually several lines of deductions for current multiple property owners.

OK enough clues for the next generation to find and make their best decisions.

I only meant future multiple property owners.

Current owners everything is cast in stone so not really affected.