Sat, Mar 11, 2017 - Page 10 News List

Singapore eases property curbs after prices drop

Bloomberg

Cable car cabins travel past a private condominium in Singapore yesterday.

Photo: AFP

Singapore is rolling back some property-market curbs after a three-year decline in prices made homes more affordable in the city state.

Shares of property developers surged after the surprise announcement yesterday by the government that stamp duty imposed on sellers are to be reduced and some mortgage restrictions eased.

City Developments Ltd (城市發展) shares jumped as much as 10 percent and CapitaLand Ltd (凱德) shares climbed to the highest in almost two years.

Sellers’ stamp duty, currently payable on residential properties sold within four years of being purchased, will now only apply for three years, the government said.

The rate of duty will also be lowered, to 4 percent for properties sold in the third year, to a maximum of 12 percent for dwellings sold within one year.

The move is the first relaxation of a raft of measures to cool home prices the government started to roll out in 2009, with some of the strictest restrictions imposed in 2013.

Home prices fell 3 percent last year and have declined for 13 quarters in a row — the longest losing streak since the data was first published in 1975.

The changes were “not done in haste,” Singaporean Minister of National Development Lawrence Wong (黃循財) said.

“Our aim is to ensure a stable and sustainable property market in Singapore,” Wong said.

Debt-servicing ratio rules for some mortgages will also be eased after some borrowers, particularly retirees, said the rules limited their flexibility. The changes take effect today.

“This is positive news and will take the market by surprise because there was expectation property-easing measures would be announced in last month’s budget,” said Alan Richardson, a Hong Kong-based investment manager at Samsung Asset Management. “The stealth move should lead to a scramble to re-rate property developers back to book value on optimism property prices have bottomed and will start to rise from here.”

The changes to sellers’ stamp duty will help smooth some inconsistencies in the system, such as homeowners being penalized for selling when their circumstances change, like divorce or losing their job, said Christine Li (李敏雯), director of research at Cushman & Wakefield Inc.

“Such home owners will be hit by a double whammy as they not only have to sell their properties in a down market, they also have to fork out substantial proceeds in the form of” stamp duty, she said.

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