Govt to re­duce stamp duty on sellers and re­lax some mort­gage re­stric­tions

New Straits Times - - Business World -

SIN­GA­PORE is rolling back some prop­er­ty­mar­ket curbs af­ter a three-year de­cline in prices made houses more af­ford­able in the city state.

Shares of prop­erty de­vel­op­ers surged af­ter the sur­prise an­nounce­ment by the gov­ern­ment yes­ter­day that stamp duty im­posed on sellers would be re­duced and some mort­gage re­stric­tions eased.

City De­vel­op­ments Ltd jumped 10 per cent and Cap­i­taLand Ltd climbed to the high­est in al­most two years.

“Sin­ga­pore’s prop­erty mar­ket had been weak for a pe­riod, this is more re­ac­tionary for the Sin­ga­porean gov­ern­ment to prop up the mar­ket,” said James Sout­ter, a port­fo­lio man­ager at K2 As­set Man­age­ment Ltd in Mel­bourne.

Sellers’ stamp duty, payable on res­i­den­tial prop­er­ties sold within four years of be­ing pur­chased, would now only ap­ply for three years, said the gov­ern­ment.

The rate of duty will also be low­ered to four per cent for prop­er­ties sold in the third year, to a max­i­mum of 12 per cent for dwellings sold within one year.

The move is the first re­lax­ation of a raft of mea­sures to cool house prices that the gov­ern­ment started to roll out in 2009, with some of the strictest re­stric­tions im­posed in 2013.

House prices fell three per cent last year, and have de­clined for 13 quar­ters in a row — the long­est los­ing streak since the data was first pub­lished in 1975.

De­vel­op­ers weren’t an­tic­i­pat­ing the move.

“The changes were not done in a haste,” said na­tional devel­op­ment min­is­ter Lawrence Wong. “Our aim is to en­sure a sta­ble and sus­tain­able prop­erty mar­ket.”

Rules sur­round­ing the debt-ser­vic­ing ra­tio for some mort­gages would be eased af­ter bor­row­ers, par­tic­u­larly re­tirees, said the rules lim­ited their flex­i­bil­ity.

The changes will take ef­fect to­day.

“This is pos­i­tive news and would take the mar­ket by sur­prise be­cause there was ex­pec­ta­tion prop­erty eas­ing mea­sures would be an­nounced in last month’s bud­get,” said Alan Richard­son, a Hong Kong-based­in­vest­ment man­ager at Sam­sung As­set Man­age­ment.

Sin­ga­pore is rolling back some prop­erty-mar­ket curbs af­ter a three-year de­cline in prices made houses more af­ford­able in the city state.

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