Property plays in the red on new housing cooling measures

Dec 16, 2021

SINGAPORE'S property stocks opened lower on Thursday (Dec 16), after the government announced new measures to cool the hot housing market the night before (Dec 15).

Shares of Straits Times Index (STI) property developers City Developments Limited (CDL) and UOL dropped as much as 3.6 per cent and 3 per cent respectively when the market opened. CDL lost S$0.26 to hit a low S$6.81 as at 9 am, while UOL slid S$0.21 to a low of S$6.89.

By 9.23 am, CDL was down 3.5 per cent or S$0.25 to S$6.82, with 2.1 million shares changing hands. UOL was down 2.4 per cent or S$0.17 to S$6.93, with 419,900 shares traded.

Real estate service providers and agencies also tumbled in early morning trade. PropNex fell 9.6 per cent or S$0.17 to S$1.61, with 2.2 million shares traded as at 9.41 am, while APAC Realty lost 12.4 per cent or S$0.095 to S$0.67, with 1.9 million shares traded.

Frasers Property declined 1.7 per cent or S$0.02 to S$1.13, while Oxley dropped 3.2 per cent or S$0.006 to S$0.181. GuocoLand decreased 0.7 per cent or S$0.01 to S$1.51.

From Thursday, the government will raise additional buyer's stamp duty (ABSD) rates and tighten the total debt servicing ratio (TDSR) threshold.

The current ABSD rates for Singapore citizens and permanent residents buying their first residential property will remain unchanged, but those buying their second residential property will have ABSD rates raised to 17 per cent and 25 per cent respectively.

Meanwhile, the ABSD rates for all other individuals and entities will be raised by 5 to 15 percentage points.

The TDSR threshold will be tightened to 55 per cent, from 60 per cent, and will apply to property purchase loans where the option to purchase is granted on or after Dec 16, and for mortgage equity withdrawal loan applications made on or after Dec 16.