HOME PRICES WOULD
HAVE RISEN BY A THIRD WITHOUT COOLING MEASURES
Nov 30, 2015
If the Singapore government had not introduced a series of
cooling measures to control the growth of private home prices following the
2008 Global Financial Crisis, such properties would have been more expensive
than the current norm by up to a third, revealed a study conducted by the
Monetary Authority of Singapore (MAS), and reported by TODAYonline.
Similarly, the number of private housing deals and the
volume of mortgages in the city-state would have risen by a similar level,
added the MAS.
The central bank also discovered that tax measures, like the
Seller’s Stamp Duty (SSD) and the Additional Buyer’s Stamp Duty (ABSD), had a
more significant effect on prices and transaction levels as compared to land
supply policies and lending curbs like the loan-to-value (LTV) ceiling and
Total Debt Servicing Ratio (TDSR) framework.
“The SSD reduced sub-sales significantly, whereas the ABSD
raised the hurdle rate of return for property investors.”
This has led to an exodus of foreign property buyers. In Q4
2011, the share of private residential purchases by this group peaked at nearly
20 percent, but it plummeted after the ABSD was implemented.
As a result, weaker buying activity has dragged down property
prices and mortgage lending, noted the MAS.
Meanwhile, the soft drop in home prices signals that
Singapore’s housing market is moving to a more sustainable state over time,
said the central bank, signifying that the authorities will likely keep the
cooling measures in place.
In Q3 2015, private residential prices declined by eight
percent from its peak in the third quarter of 2013.
However, MAS is still on the lookout for signs of renewed
activity in the market in light of the continuing high prices in particular
areas, such as those in the Outside Central Region, where it is still 30
percent above levels seen before the 2008 global economic downturn.
Info courtesy - Propertyguru