SINGAPORE: A confluence of internal and external factors have strengthened the case for the easing of a series of property cooling measures introduced by the government since 2009.
Internal factors include the ramping up of construction of new homes, both HDB and private condos, over the last five years, leading to concerns of a near-term oversupply.
Also of concern is the underperformance of the Singapore economy, which has been lagging behind expectations.
The tightening of foreign labor in Singapore has also caused a dampening in rental demand the last few of years, and the situation may exacerbate with the large supply of housing completions over the next couple of years.
External factors are mainly the likely rate hike of interest rates in the US later this year, and the ripple effects it may cause across emerging markets – including a capital flight reversal into the US markets, tighter liquidity conditions and generally higher interest rates.
All these factors have raised concerns several times during Parliament, and it is only a question of when, not if, some of these cooling measure will be eased.
“We want a soft landing for our housing market because a market crash benefits no one,” said National Development minister Khaw Boon Wan in response to such concerns.
“Indeed, we should not overkill. The property market is in transition and it is a time that calls for vigilance and nimbleness. We will be careful,” said Khaw.
As it stands, analysts from five banks have given their take in the media on when the government will ease some of the property cooling measures.
Banks’ Predictions On Timeline for Easing of Cooling Measures
|Maybank (Kim Eng)||Second half of 2015|
|HSBC||Second half of 2015|
|Barclays||After GE (which must take place by May 2016)|
Some of the banks think these measures are the most likely to be eased.
- Additional Buyer’s Stamp Duty (ABSD) on a second or subsequent property
- Total Debt Servicing Ratio (TDSR) framework
- Mortgage Servicing Ratio (MSR) on HDB loans.
What’s your take?