Singapore’s cooling measures have been relaxed adding to the country’s investment appeal.
News of the Singapore government relaxing the cooling measures placed on residential properties is welcome news to investors. Put in place in 2009 in a bid to stop speculative purchasing, the market took a hit with values decreasing since 2013. Due to slow demand and stagnating values, the government have reassessed the measures.
The cooling measures put in place included increased stamp duty rates and making it harder for borrowers to obtain mortgages. This included not permitting investors to sell their properties within four years of when they purchased it. This has now been reduced to three years. For stamp duty, the rates have been reduced by four percent across the board.
Lending conditions will also be eased. Currently investors can borrow 60 percent of their monthly income. However, this will now not apply for those with a loan-to-value ration less than 50 percent. The aim is give borrowers more flexibility with their money to aid for their retirement.
Many Singapore experts in the field including Real Estate Developer’s Association of Singapore have called upon the government to reevaluate tax policies. Citing the slowing market as reason for this. However, there was no mention of this in Singapore’s budget on 20 February.
This u-turn in decision has resulted in the rising of share prices in the industry. Developers CapitaLand and City Developments Ltd both enjoyed an increase of 4.8 and 7.4 percent. This is likely to signify a new chapter in Singapore’s housing market. Singapore’s robust economy has made it attractive to investors looking to park their money. A flurry of activity is expected with this news as investors who take the plunge when the market has reaches the bottom will reap the benefits of a rising market in the future.