Budget 2016 Quick Takes: Double whammy for property developers

SINGAPORE'S Finance Minister, Heng Swee Keat, told Parliament on Thursday that it is too premature to relax property cooling measures given the price level and current market conditions.

"We will continue to monitor developments in the property market closely," Mr Heng said in his Budget 2016 speech.

Here are some comments:

Low Hwee Chua, Head of Tax Services, Deloitte Singapore and Southeast Asia:

"As hinted by various Government officials, the Finance Minister has confirmed that it is too early to relax the current property cooling measures."

"It is a double whammy for property developers as manpower costs will increase due to the non-deferment of the previously announced increase in foreign worker levies for the construction industry."

Christine Li, director and head of research at Cushman & Wakefield:

"As expected, the property cooling measures are not lifted. This did not come as a surprise."

"The residential transaction volume has been halved since the implementation of the Total Debt Servicing Ratio (TDSR) framework in 2013 and there is "frustrated demand" in the market as buyers are deterred from entering the market due to the additional buyer's stamp duty (ABSD)."

"As a result, a pre-mature lifting of the cooling measures, particularly the ABSD, could result in buyers rushing into the market for fear that property price may rise due to increased demand."

"Given that the only beneficiaries of the lifting of the cooling measures such as tweaking the ABSD will be property developers, Singaporeans who can afford a second property (as ABSD does not apply to first time buyers), permanent residents and foreigners, it does not serve the interest of the masses as having these measures in place will help to keep prices affordable."

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