Property News
Singapore’s private residential property prices saw an increase of 34 per cent year-on-year – the highest globally. The reasons for this truly significant leap are the exuberant economic performance and record-low interest rates. Despite earlier anti-speculative curbs introduced by the Singapore government as long ago as September 2009, prices for private properties have been on a steady rise, albeit at a slower pace.
On 30th August 2010, the Singapore government announced that private property owners are now subject to a higher cash payment, as well as a lower loan-to-value (LTV) for property buyers with more than one outstanding loan. Sellers’ stamp duty has also been increased from one year – announced in February 2010 – to three years for home owners looking to sell their properties. This translates to as much as 3 per cent should the property be sold within a year of purchase, 2 per cent if sold two years after purchase, and 1 per cent if sold three years after purchase.
The rationales behind the latest anti-speculative measures is to control housing prices and provide aid to genuine home owners. The measures are aimed at protecting the property market, given that there is still much uncertainty lingering in the global markets. Weak employment data from the United States constantly injects fear into the sentiments of the investors. Both China and Hong Kong are implementing policies to prevent their overpriced property markets from turning into asset bubbles. The European economy is still relatively weak, albeit closing in on a self-sustaining recovery according to the European Central Bank. The aforementioned factors, combined with the anti-speculative measures, present a real concern for homeowners, prospective buyers and investors. They now find themselves unable to leverage their financing as much as previously, and now have to hold their assets for a much longer period due to the extension of the stamp duty imposition period.