Even though the decline in residential prices last year was not substantial, it is time for the government to soften the blow of its property cooling measures, according to media reports citing experts.
Based on data from the Housing Board and the Urban Redevelopment Authority (URA), private home prices fell by four percent in 2014, while that of HDB flats dropped by six percent.
However, home prices are still higher than those in mid-2009 by about 60 percent. As Deputy Prime Minister Tharman Shanmugaratnam said in October, there is still “some distance to go in achieving a meaningful correction, after the sharp run-up in prices in recent years”.
Nevertheless, the time has come for the authorities to tweak their property curbs, analysts opined.
For instance, reducing the Additional Buyer’s Stamp Duty (ABSD) for Singaporeans buying their second property would be viewed positively, said UBS Research Director Michael Lim, who proposed a cut of one to two percentage points.
Rodyk & Davidson Partner Lee Liat Yeang noted investors are already under the stringent Loan-to-Value limits and Total Debt Servicing Ratio (TDSR) framework, so they cannot invest beyond their financial means.
Furthermore, it would be easier for Singaporeans to buy a second property and it would also help sell the huge number of upcoming supply. This year, more than 21,300 condos are expected to enter the market in 2015, with another 36,000 to be completed over the next two years.
Muneerah Bee, Senior Journalist at PropertyGuru, edited this story. To contact her about this or other stories email muneerah@propertyguru.com.sg
