Property watchers and players in Singapore are increasingly hoping for some help from the government to boost the sluggish residential sector.
New private home sales this year look set to hit their lowest levels since the 1997 Asian financial cisis. And the outlook is weak, amid the global downturn.
Only 3,900 new private homes have been sold year to date. Property watchers said this could be the first time in 11 years that sales for the year totalled below 5,000.
Consultants from Chesterton Suntec International pointed out that property advertisements have come down to a trickle, a signal that developers recognise that buyers will not be easily persuaded. This situation is unlikely to change before the year runs out.
Property agents said they are hoping for some market stimulus in the upcoming Budget announcement, while developers said they want some help in cushioning the impact of a poor market.
“We’re looking forward to the government’s proposed Budget in January for stimulus package, a package that could revive the activity in the residential property market,” said Donald Han, managing director of Cushman & Wakefield.
This could be in the form of reviving schemes that have helped the market in the past.
Han said: “One of them obviously is for the return of deferred payment. We’re also looking to any reduction in rental levels. Property tax rebates could come from landlords to tenants to reduce occupancy costs.
“You’ll see some measures in the past which address downturn period, a cycle like what we’re experiencing right now.”
Developers are also hoping for a reversion on new rules like earlier stamp duty payments, and the way the development charge is calculated. They said property tax concessions for vacant land as well as rebates for office buildings would also help.
Colin Tan, the head of Research and Consultancy from Chesterton Suntec International said deferred payment is already available on most projects currently on sale, and without it, projects coming on in 2009 and 2010 may see even weaker sale conditions.
However, some analysts said the government may have other priorities on its plate.
“We saw about 3 or 4 years of very active transactions and price action in the property market, so some degree of consolidation is healthy. In that sense, maybe we should be looking for stabilisation instead of further stimulation,” said Tai Hui, regional economic research head of Southeast Asia at Standard Chartered Bank.
Some argued that for now, the bigger picture may be more important.
David Cohen, director of Asian Economic Forecasting at Action Economics said: “More important than any fine-tuning in the tax system will be the timing of turnaround in global activity which Singapore doesn’t really have a control over.”
The Budget will be announced in January next year.
Source : Channel NewsAsia – 20 Nov 2008