(The Singapore property market is veering towards making it harder for foreigners to purchase property in the country. Image courtesy of thinkstock.)
The new measures include a never-before-seen additional 10% buyer’s stamp duty on foreigners buying any residential property in Singapore.
Property agents The Straits Times spoke to told of various clients’ immediate reactions to the sudden news. Some agents hurriedly issued options late into Wednesday night—the new regulations kicked in last Thursday—but for an unfortunate number, deals almost fell through mere hours after the announcement was made.
Others juggled calls from clients who fretted over how the new measures affected them. GPS Alliance agent Benjamin Tan revealed that most of his Indonesian clients have put their purchases on projects like The Interlace and The Palette on hold. Said Savills agent Alfie Cai to The Straits Times, “On Wednesday, I had about 10 clients and friends of clients calling me all the way till midnight.”
Meanwhile, a few developers were swift to take action after learning of the regulation changes. For instance, The Straits Times discovered through an “internally circulated text message” it obtained that UOL Group—concerned over the potentially massive loss of sales—had offered agents large cash incentives to secure deals at its Archipelago project located in Bedok. $5,000 was awarded for each one- and two-bedroom unit sold, $10,000 for each three- and four-bedroom unit, and $15,000 for four bedrooms and above. The cash incentives ended on Sunday.
Other developers appeared more cautious. Several that The Straits Times queried said they will go ahead with announced launches, but might reassess the rest if market reaction over these next few weeks is less than acceptable.
CapitaLand Residential Singapore chief executive Wong Heang Fine reported no cases of Bedok Residences buyers not exercising their options. The project was launched last month at around $1,350 per sq ft. As for new launches, he said, “It is early days yet and more time is needed to assess the real impact of the measures on our sales and marketing strategy.”
City Developments reasoned “the measures will have a dampening effect in the short term so we will have to reassess the market situation and, if necessary, tweak our strategy”. Its spokesman said that the effects of the stamp duty will have “limited downside” because the firm’s recent launches targeted mainly first-time buyers and upgraders.
Such also seems to be the case for Roxy-Pacific, whose executive chair and chief executive Teo Hong Lim told The Straits Times that the firm will likely stick with the Lunar New Year launch of its Treescape project in Telok Kurau. “Nobody can predict how the market will react. We have to read beyond the current measures; this is not a financial crisis.”
Agents, however, were not as comfortable. With analysts warning prices can plunge as much as 30% next year and sales volume by up to 20%, Cai pointed out that some of his clients who are still keen on buying a property in Singapore will be holding off their purchases until they attain their Permanent Resident (PR) status.
Under the new regulations, PRs and Singaporeans will not need to fork out the extra 10% stamp duty, which is only applied to foreigners and corporate entities. However, PRs buying their second house onwards, as well as Singaporeans buying their third and subsequent homes, will have to foot an additional 3% buyer’s stamp duty.