Singapore Government Boosts Property Market

The Singapore government has softened cooling measures introduced in 2009 to slow growth in the property market, resulting in a surge in property investment activity.

The measures included sellers’ stamp duty on all properties sold within 4 years of purchase, and after introduction of the measures in 2009 property prices fell for 13 quarters running.

The decline began to slow in 2013, but property values still fell by 3 per cent in 2016.

The Singapore government has now relaxed the sellers’ stamp duty period to 3 years and also reduced the rate paid to 4 per cent on properties sold in the third year, and a maximum of 12 per cent for properties sold within the first year of purchase.

Partly as a result of this new legislation property sales boomed in February, more than 200 per cent year on year from 303 sales in 2016 to 977 sales in February 2017.

This figure was also up from 382 sales in January and represents the highest February sales figures for 5 years.

K2 Asset Management portfolio manager, James Soutter, commented: ‘Singapore’s property market had been quite weak for a period, this is more reactionary for the Singaporean government to prop up the market.’

Property developer’s shares have risen strongly following the decision from the Singapore government, and research is suggesting that positive sentiment is spreading throughout the property market in Singapore.

Developers are rushing to cater to the new demand with 550 units offered in February, compared to just 108 available in the previous month.

National Director of Advisory and Research at JLL Singapore, Regina Lim, commented: ‘Our outlook for the Singapore property market in the coming years is a positive one.

‘Transactions of luxury residential units doubled in 2016 and prices for this segment have risen mildly. Buyers see Singapore’s luxury residential properties as compelling given the competitive pricing. We expect transaction volume and prices to continue to recover from 2017 to 2020.’

Long a preferred Far East destination for British overseas property investors, Singapore finally looks to be getting back on track.