Singapore Considers Cooling Down The Properties Market
With the local economy started to turn more favorable, the Singapore property market has finally showed signs of life. However amidst all the noises and optimism, Singapore government has declared in November 2009 that it is considering calibrated measures to contain the rise of the real estate market. Market activities have picked up considerably and economists are busy painting a rosy picture on real estate transactions in the coming months.
Perhaps the memory of the sudden boom and a slump in the mid-nineties, is still fresh in the administration mind. And this time the government more determined to prevent such a sharp recording and possibly followed by equally rapid reversal of the market.
The Singapore government has quite a few options at their disposal and they are land supply strategy, credit tightening and taxation policies. We will go over each of these in more details.
Land Supply Decision - This could be the most effective tool to counter the red hot demand of properties of all types in Singapore. As the government cut down on the release of land for new development, this is certainly going to slow down the supply for new projects being launched to the market, thus putting a curb on the unreasonable property speculation.
Financing - Recently there have been speculations in the market that government may review the guidelines for financial facilities such as private housing loan. Currently the maximum loan amount a lender can approve to a qualified private house buyer is 90 percent. Market players and speculators would be hard hit if this amount is brought back to 80 percent of purchase price.
Taxation Policies - As the government evaluates the options for its intervention in the real estate market, this one would likely feature somewhere in the plan. This capital gain tax has always been a convenient tool to in the past to combat excessive housing appreciation in Singapore. And when it is re-introduced to the market, it would certainly affect the market in a major way.
Raise Property Tax - In general those owner-occupiers in Singapore currently pay half of this amount. These folks may be subjected to a higher tax than the current 10 percent.It could also be a focused approach targeting property investors and speculators.
Double Stamp Duty - Again, this might be for the slowdown in the market speculators as the stamp tax effective would be imposed if he decides to buy or sell a property.
So you have it, a short list of possible measures to combat the threat of overheating property market. However, it is still too early to say whether the government will exercise their options as the market is still directionless at the moment. - 23167
Perhaps the memory of the sudden boom and a slump in the mid-nineties, is still fresh in the administration mind. And this time the government more determined to prevent such a sharp recording and possibly followed by equally rapid reversal of the market.
The Singapore government has quite a few options at their disposal and they are land supply strategy, credit tightening and taxation policies. We will go over each of these in more details.
Land Supply Decision - This could be the most effective tool to counter the red hot demand of properties of all types in Singapore. As the government cut down on the release of land for new development, this is certainly going to slow down the supply for new projects being launched to the market, thus putting a curb on the unreasonable property speculation.
Financing - Recently there have been speculations in the market that government may review the guidelines for financial facilities such as private housing loan. Currently the maximum loan amount a lender can approve to a qualified private house buyer is 90 percent. Market players and speculators would be hard hit if this amount is brought back to 80 percent of purchase price.
Taxation Policies - As the government evaluates the options for its intervention in the real estate market, this one would likely feature somewhere in the plan. This capital gain tax has always been a convenient tool to in the past to combat excessive housing appreciation in Singapore. And when it is re-introduced to the market, it would certainly affect the market in a major way.
Raise Property Tax - In general those owner-occupiers in Singapore currently pay half of this amount. These folks may be subjected to a higher tax than the current 10 percent.It could also be a focused approach targeting property investors and speculators.
Double Stamp Duty - Again, this might be for the slowdown in the market speculators as the stamp tax effective would be imposed if he decides to buy or sell a property.
So you have it, a short list of possible measures to combat the threat of overheating property market. However, it is still too early to say whether the government will exercise their options as the market is still directionless at the moment. - 23167
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