The recent budget announcement has brought about some changes, though most real estate analysts consider the effect on the property market slight.
Budget brings about slight effect on the real estate market
The most significant adjustment is the hike in stamp duty. While this may not immediately result in a spike in new home prices, it may introduce some resistance. Transaction volume may fall as buyers take in the latest regulatory modifications. Stamp duties for residential properties valued above $1 million were raised from 3% to 4% in the new Budget. Stamp duties for properties valued below $1 million remain between 1% to 3%.
Related: Stamp duty rate rise from 3% to 4%
The initial thought of waning collective sales did not seem to take hold, and perhaps it is this trend which will affect more change. The sky-high prices developers have been paying for land may mean an increase in new home prices.
But analysts are predicting continued recovery for at least the next few years.
Private home prices have risen 1.1% last year, finally after a fall of 3.1% and 3.7% in 2016 and 2015. Last year, sales volume for private homes rose 33%.
Singapore’s property market prospects good in comparison
And should economic growth continue in the right trajectory this year, Singapore’s position as a city with real estate potential will remain. In comparison to other cities such as Shanghai and London, Singapore’s property prices are considered affordable.
What does the next 4 to 5 years hold for the property market?
According to the number of completed and in-progress land sales, the available inventory may be enough for 4 years of demand.
How would that affect prices should the economy moderate?
For the moment, 19,000 unsold units were carried forward to 2018 and more units will be entering the market from last year’s land sales bonanza. With Singapore’s land scarcity, are mixed-use developments the city’s next major trend?