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Latest Property Real Estate News - Published on 08/12/2011
In the harshest cooling measures seen so far, foreign buyers of the private properties in Singapore will now have to fork out a hefty 10% increase in the stamp duty while permanent residents and Singaporeans are also affected with an increased stamp duty on their second and third properties respectively. This is going to be a major psychological setback and the immediate reaction will be a slowdown in the private property with transaction volume diving by 40% in the core central region and a dip of 20% in the mass market segment.
“The second round of cooling measures implemented in 2011, this time it was a surprise for many, with a huge increase of stamp duty on foreigners’ purchase of the private property. This increase in stamp duty, which can amount up to $124,600 from an original $24,600, (for a $1m home), is going to dampen the interest of private property investment in Singapore. Foreign buyers, if were to sell their property within the next four years will also be subjected to the sellers’ stamp duty of 16%, 12%, 8% and 4% in the first, second, third and fourth year of purchase respectively. This is a double whammy for foreign buyers, as in the earlier cooling measure of sellers’ stamp duty, and has already eradicated speculators. The measures could have been targeted at preserving affordable prices in the mass market segment, those homes costing less than $2m as the prices have surpassed $1,000psf with recent interest of foreign buyers investing in this segment. Having a blanket policy will impact the high-end market and this is detrimental as high-end homes have always been the investment interest of the foreign buyers,” commented Mr Mohamed Ismail, CEO of PropNex Realty.
“It is projected that there will be a price correction of approximately 15 - 20% in the central core region and 10 -15% in the mass market segment for the next six months. Potential buyers (Singaporeans and foreigners) will now wait out to see the impact of this latest cooling measure and its correction before entering the market again. A foreign buyer of a private property here in Singapore will have to take a very bold move in investing amidst the global crisis and a grim economic outlook in 2012,” remarked Mr Mohamed Ismail, CEO of PropNex Realty.
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