Prisca Ang
THE BUSINESS TIMES
THE Singapore government will continue to monitor the property market closely and consider suitable adjustments to its cooling measures when necessary, said a Ministry of Finance (MOF) spokesman.
These actions are aligned with the government's objective to promote a stable and sustainable property market, she said.
MOF was responding to a BT query about strong market sentiments that there will be changes to cooling measures - in particular, the additional buyer's stamp duty (ABSD) - in the near term.
According to a pool of professionals in the property industry, there has been growing anticipation that the ABSD - levied on foreign home buyers and Singaporeans who own more than one residential property here - could be lifted, either fully or in part, for Singapore citizens.
Earlier this week, RealStar managing director William Wong suggested that expectations of changes to the ABSD were high, and this was one of the reasons he cited for the growing sales of landed homes by end-2015.
If this view holds true, Singaporeans could find it more affordable to purchase second homes here.
However, observers that The Business Times interviewed said that it was too soon to tell, and that market sentiments - as always - should be taken with a pinch of salt.
Even if the sentiment rings strong, several are less optimistic about the potential lifting of cooling measures.
"There might be changes, but not a drastic removal," said Alex Toh, associate (banking, finance and property department) at Withers KhattarWong.
"The government might do it in stages. Even so, it would probably be an incremental change such as a percentage reduction every half a year."
Mr Toh added that the lifting of cooling measures might still be a distant possibility given the property market's room for further price correction.
Likewise, PropNex CEO Mohamed Ismail reckoned that there would not be a "total removal" of the ABSD.
"The percentages might be brought down and there could be tweaking across the board if market sentiment is weak."
Said Lee Liat Yeang, partner of Rodyk & Davidson Real Estate Practice Group: "Most people agree that it is too early to lift the ABSD completely. Prices have corrected but the market has not been in a stable position due to the oversupply of new residential properties."
He added that while prices in the high-end, or luxury, market may have corrected, this might not be the case for the mass market segment.
In October last year, Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam said that property prices here had yet to see a "meaningful correction" after the sharp run-up in prices in recent years.
"If we do not get a meaningful reversal after each upswing, property prices will run ahead of the growth in household incomes in the long term. And that, we must avoid."
Regardless of the validity of market views, the big questions are "How do you review it?" and "What do you want to do?", said Mr Lee. In a way, the ABSD is an additional measure over and above the usual stamp duties, he said.
While other measures such as the total debt servicing ratio (TDSR) prevents people from investing beyond their financial means, the ABSD is more broad-based as a policy as it applies to people with high financial ability too, he added.
"It's the property cooling measure that will make the most significant difference, as it can often act as a psychological dampener on people's purchases."
With slumping home prices and sales recently, observers said that a lift would be a welcome reprieve.
"If you ask me, I'd dare not speculate," said Mr Mohd Ismail. "But it would be timely for the ABSD to be lifted, especially when the property market is sluggish."