Two groups seen to gain from new property curbs

As the property market reels from the shock of new curbs to cool prices, some market watchers say two groups will stand to benefit the most.

They are the mass market condominium developers and Singaporeans who are buying their first private property or upgraders.

Meanwhile a check on the showflats on the first weekend after the new property curbs took effect showed mixed scenes. While some showrooms were quiet on Saturday, others like the one for the Palette at Pasir Ris saw a steady flow of potential buyers.

Is the quiet scene a sign of the lull that property watchers have predicted in the wake of the new curbs to cool the market? It depends, as it is now the December school holiday period, which is usually quiet on the property front.

Nevertheless, property watchers expect many to adopt a wait-and-see approach in the wake of the new measures.

But one group appears to be paying more attention to the price movements – Singaporeans who do not have to pay the extra buyer’s stamp duty for a second property and who think private home prices will dip now that an additional 10 per cent stamp duty has been imposed on foreigners.

SLP International’s executive director for research & consultancy, Nicholas Mak, told Channel NewsAsia that the additional tax may deter foreigners buying private properties in Singapore.

He said: “The stamp duties to be levied on non-resident foreign buyers are actually very hefty. Going ahead, there’ll be market uncertainties and investors are not sure whether their investments are able to recover the stamp duties, or, maybe even be profitable. Hence that additional stamp duty is going to deter some of the short-term speculative buyers.”

Singaporeans planning to buy their first private property welcomed the changes.

Managing director Don Tan, a 36-year-old Singaporean with a family of four, said: “Singaporeans can really plan for the future. If it (price) keeps rising, then I think my future generation, there’s no place for us already…(In) Singapore, after all, the land is constrained so it’s better that we put some control to it (property market) so that Singaporeans are put on a higher priority.”

Mr Jing Yang, 29, an IT engineer, said the new property measures have their pros and cons. He said: “…it might help more Singaporeans to own private property. But if you are doing investment, it’s a higher risk now.”

SLP International’s Mr Mak said that mass market condominium developers should stand to benefit from the new measures.

He said: “The latest round of measures are going to affect different developers differently, because it’s going to adversely affect the high-end properties more than the mass market properties.

“The reason is that high-end properties depend more on investors and also sometimes they are targeted at foreign investors. Hence developers who specialise in high-end properties might be more affected than those who specialise in mass market condominiums.

“Developers of mass market condominiums might look at their product mix. They may want to develop more three-bedroom or larger-size apartments to attract Singaporean buyers who may be planning to buy for their own occupation, because such buyers are not affected or less affected by the latest cooling measures.”

Mr Mak added some developers are speeding up plans to launch their projects while market conditions remain favourable, before the situation becomes more uncertain next year.

Source : Channel NewsAsia – 10 Dec 2011

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