Singapore's new ‘cooling measures’ – imposed last month – are expected to hit its housing market more severely than ever before, in a bid to keep it ‘stable and sustainable’.
The Singaporean government recently raised Additional Buyer's Stamp Duty (ABSD) rates and tightened loan-to-value (LTV) limits on residential property purchases in an effort to "cool the property market and keep price increases in line with economic fundamentals".
As part of this:
These new measures have come at a time when the housing markets are rebounding in Singapore. Private home prices rose to their highest point in four years in the April to June quarter. Analysts predict that prices could soon recover to 2013 peak levels.
"There is a large supply of units coming on stream and interest rates are going up,” says Lawrence Wong, Minister for National Development. "We want to avoid a severe correction later, which can have more destabilising consequences. Hence we are acting now to maintain a stable and sustainable property market."
"I think prices will also certainly be affected and we have already seen that in some of the newer projects that were recently launched (in the market)," adds Sherman Kwek , group chief executive of City Developments Ltd (CDL) "If you ask me for a personal opinion, I think they are probably launching at maybe 10 to 15% below what they could have launched."
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