Saturday, January 26, 2013

Developers: Cooling Measures not a Good Idea


iProperty
Jan 25, 2013

Rather than using the standard cookie cutter mold, developers believe that cooling measures imposed on the property market should be less general and more specific to target groups.

This was said in reference to the recent slew of cooling measures implemented earlier on January 12. The measures included a higher stamp duty for all home buyers except Singaporean first-timers, tighter loan-to-value restrictions, and down-payments that take up a higher percentage of the property’s value.

Developers believe there is a need to cater to the varying groups of buyers in Singapore’s highly segmented property market, taking extra care in differentiating between locals and foreign investors. In particular, they believe that if the aim is to keep housing affordable for the general public, the cooling measures should leave private properties untouched. Since public housing takes up 80% of the market, by targeting just this 80%, the cooling measures would have already helped a majority of the market.

Analysts project that the measures are likely to cause a drastic fall in the number of foreign talent into Singapore, which maybe work against what the country is trying to achieve. While prices are not expected to fall drastically since developers are able to hold on to inventory till they get the right price, the same cannot be said for sales volumes. Most industry insiders believe that sales transactions will fall by 30 to 40% while prices stay flat.

Some developers suggested stopping runaway price hikes by changing the way land sales auctions are conducted. They used Hong Kong as an example, where instead of setting prices based on the future outlook, land sales bids are based on reserve price. Reserve pricing is based on the historic property values, which may help moderate price increases.


Martin Koh | 86666 944 | R020968Z
Sherry Tang | 9844 4400 | R020241C
Senior Sales Director
Email: marshe_inc@yahoo.com.sg
DTZ Debenham Tie Leung (SEA) Pte Ltd (L3006301G)

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