Cooling the Singapore Property Fire: A Sudden Move That Stunned the Market
On Friday, the shares of a handful of Singapore real‑estate giants took a sharp dive—right after a surprise policy tweak by the government that slapped new limits on property purchases. From the bustling streets of Orchard Road to the quiet lanes of Clementi, investors felt the pinch.
What Went Down?
Just a day earlier, the government added five extra percentage points to the Additional Buyer’s Stamp Duty (ABSD) for anyone buying a second or later house—yes, both citizens and permanent residents. In addition, they tightened the borrowing limits that developers can get on new homes.
For the first time in a long time, that move saw price growth stall and options for developers shrank.
Why It Matters
- Market Sentiment – After months of steady rises, a sudden policy shock jarred the market, prompting a flurry of “sell, sell, sell” orders.
- Developer Pressure – Firms that have been gobbling up government and collective sales—big names like Oxley, City Developers, Keppel’s real‑estate arm, and Wing Tai—now face a tighter squeeze.
- Government Caution – The Monetary Authority of Singapore’s Ravi Menon reminded us that the “recovery” is “welcome but must not outrun the fundamentals.”
How the Stocks Reacted
During the trading day, Oxley and City Developers slumped almost 15% each, while Wing Tai droped 8%. Analysts at KGI Securities called the reaction a “knee‑jerk” to the new limits.
Jane Dunne (not a real person) might say, “We were expecting a smooth climb, not a sudden stumble.”
Future Outlook
Nicholas Mak from ZACD pointed out that in the next couple of years, there could be anywhere from 28,000‑30,000 new housing units waiting in the wings—meaning the supply isn’t looking down on us.
In a nutshell, he warned that price growth could slow significantly, even flatlining, by year‑end.
Why The Government Is Doing This
The joint statement from the central bank, finance ministry, and national development ministry spelled it out: rising prices that outpace the economy could spark a risky correction later, especially with interest rates on the rise and a healthy pipeline of houses.
Think of it as a gentle hand on a toddler’s back—removing the urge to run before we’re ready.
Key Takeaway
While the market may be cooling now, the relics of a near‑four‑year decline are slowly eating back, and the government’s playbook is focusing on keeping growth anchored in sound fundamentals.
So, next time you’re planning to buy a property, remember—keep both your enthusiasm and your spreadsheets under review. The Singapore market is making sure you don’t get swept away by excitement alone.
Singapore’s Housing Market Gets a New Power Surge
Picture this: a packed line of eager buyers gawking at the glamorous showflat of Riverfront Residences in Hougang on July 5, 2018. And why? Because the Government has just announced a “cool‑down” plan that will make even the most seasoned home buyers rethink their strategy.
ABSD, the Big Bad Fee
Here’s the tweak: if you’re buying a third property or a second residency for Singaporeans, buckle up – you’ll now pay 15 % in Additional Buy‑Sell Duty (ABSD). Foreigners get the short end of the stick: 20 % for individuals and a whopping 25 % for corporate buyers.
Loan‑to‑Value Gets a Shrink‑Shank
Not stopping there – the allowable loan-to-value ratios are slashed by five percentage points. So your mortgage’s dream of a huge loan shrinks a bit, which means more extra cash on hand.
What This Means For You
- Buying a second home worth S$1.0 million (US$733,000) will now cost an additional S$50,000 in cash. That’s a total ABSD of 15 % on the whole purchase – a hefty shout, and you’re looking at a stamp duty bill of S$144,600.
- DBS Bank claims that these cooling measures hit the market like a surprise punch – you may not have been ready for this.
- Industry guru Lewis Ng of PropertyGuru says, “While it might sting homeowners now, it’s all about financial prudence and a steadier market in the long run.”
Real‑World Impact
The Straits Times Index dipped 2.22 % after midday Friday, and property stocks were among the biggest losers. Most Singaporeans still live in high‑rise government flats or private condos, but this new fee structure could slow the tempo of the property market’s recovery.
Bottom Line – Hold Your Hand
In short, if you’re dreaming of a second nest or a flashy overseas buy, stash a little extra money in your pocket. It’s all about caution in this new climate – and, as Lewis Ng puts it, a paint‑brush strokes away from a more stable real‑estate canvas for everyone.
