? The latest measure - additional buyers’ stamp duty (ABSD), is hardly a “complete” surprise:
- Primary sales have been strong, no doubt due to depressed borrowing costs, and which has attracted attention of the authorities, especially the Finance Minister (this bears watching ).
- Property prices have continued to rise, albeit more moderately in recent times, despite concerns of likely impact of the eurocrisis, and slowdown in the US.
- Signs of increased speculative activity, evidenced in recent overnight queue at launch of Bedok Residences going for $1300 psf (!).
- Significantly increased participation by foreigners and PRs.
? The way ABSD will work is as follows:
- Foreigners and corporate entities have to pay an additional 10%;
- PRs will pay the additional 10% when they buy second and subsequent homes;
- Singaporeans will pay additional 3% when buying their third property or more.
? The growing presence or participation of foreigners in the private residential market can be seen thus:
- 19% of all private properties sold in H1 ’11 vs 7% in H1 ’09;
- In the prime-and-mid-prime districts, nearly 25% of caveats lodged in Q3 ’11 vs 16% in 2010 and 13% in 2009;
- In the suburban mass market segment, from 5% in 2009 to 7% in 2010 and 15% in Q3 ’11.
? Property stocks will no doubt take a hit, and likely centered on the purer local residential plays - City Dev, SC Global, Wing Tai, Oxley.
? Stocks like CapitaLand, Keppel Land may be less adversely affected given their increased focus outside Singapore; Ho Bee, having sold off most of its residential properties and now focusing on One North.
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