Can Singapore Tame its Residential or Commercial Property Market with New Rules?

Can Singapore Tame its Residential or Commercial Property Market with New Rules?

The Singaporean government has unleashed a set of curbs to keep residential and commercial property prices in check. There has been sharp criticism of the curbs but many also feel it is a necessary evil. The curbs have been in effect for a little over a fortnight now and it is perhaps too early to judge its impact. If anything, the onset of the curbs influenced many developers, property dealers and agents, investors and homebuyers to consider last minute sales. While developers organized special events to sell their inventory before the curbs set in, agents and dealers went hammer and tongs to woo prospective clients, investors rich in cash chose to make the most of the lenient regulations and homebuyers also preferred to make the most of available discounts and other perks.

The residential and commercial property market of Singapore is poised at a tricky juncture. There is ample available real estate, including new en bloc developments where tens of thousands of residential units are available and would be up for sale in some months. There is substantial commercial development too, despite the country being one of the most expensive in the world to have an office in downtown or nearby areas. The property market has been growing at a faster pace than the economy. According to official figures, the growth has been pegged at over nine percent in the current fiscal. This is basically inflation. A closer look and one would find many residential and commercial properties lying vacant and many new developments going unsold, albeit not in entirety.

The government of Singapore is sensing a real estate bubble and it does not want a recovering economy to suffer a whammy with the property market going bust. A correction several years down the line would have a horrifying impact on the economy and it may even prove to be disastrous. There may not be any global repercussion, like the one in the United States had in the last decade, but citizens would surely be hit hard and their financial well-being may be threatened. Even today the prices of houses or apartments are not in sync with the economic growth. The government wants to discourage developers going on a spending spree and redeveloping land or working on en bloc projects when there are few takers.

Many curbs are now in effect, what some analysts are calling draconian. Foreign investors or property buyers will have to pay a stamp duty of twenty percent when buying a house or investing in any real estate deal in Singapore. Citizens or locals who already own a home would also have to pay higher duties for the second properties and subsequent real estate investments. The higher stamp duties are not unheard of. Hong Kong has a similar policy, charging up to twenty percent more when foreigners invest in real estate. Some of the curbs also impose limits on loan amounts and that would have an impact on demand or the ability of many to buy homes.

About the Author

Morris Edwards is a content writer at CompanyRegistrationinSingapore.com.sg, he writes different topics like Things to Consider Before Making a Property Investment in Singapore, 10 reasons to invest in Singapore commercial property and all topics related to Singapore Business and Economy. If you want to Register a Singapore Company  Call us or visit our website.

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Category Business