Reported in propertyguru.com.sg, the luxury residential property market in Singapore is not doing fine. In fact, it is doing pretty badly. After dropping 15.2 percent within the past 12 months (June 2014 to June 2015), it is now ranked last among the luxury residential market in the world. The main reason is because of the Additional Buyer’s Stamp Duty (ABSD). This is a whopping 15 percent for foreign buyers. In other words, all foreigners who bought today would automatically lose 15 percent from whatever price they may sell in future. Does not seem like a great deal, really.
What can be done? Well, the government should ease the ABSD for this segment because this is not a segment that many Singaporeans buy into. The call came from Real Estate Developers’ Association of Singapore (REDAS) President Augustine Tan. Besides, all statistics have shown that the prices have been coming down, even if not all are giving the same numbers. With more property investments, it should also help to activate the economy, grow investment and even create more jobs for Singaporeans. The one good news is that unemployment rate in Singapore is already below 2 percent today.
Which are the three high performing markets? According to Knight Frank’s report, Vancouver in Canada, Miami in the US and Sydney of Australia occupy the top three. Their prices have grown 15 percent, 13.9 percent and 12.5 percent respectively for the past 12 months. According to Knight Frank, their report covers just the prime property market and this is the top 5 percent of all the markets that they track. This is why the reduction in terms of percentage is different from what the Singaporean government is saying. Read here: Lifting cooling measures? Too soon: MAS It said that prices have only moved down 7% and thus, all the cooling measures should continue.
I think I do agree with REDAS President. If he has statistics to show that Singaporeans are not buying into this segment, then the government should be more pro-investment because the buyers who can afford these units are definitely the super wealthy ones. Perhaps this has to also do with being seen to be sensitive to the public but I think the Singaporean government is already doing a good job when it comes to HDB flats. Thus, these two issues may need to be looked at separately. We will just have to see what happens at the end of the year, after the election. Happy reading.
written on 8 Aug 2015
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