Sellers’ Stamp Duty rates tweaked

From March 11, the staggered rates which sellers have to pay should they resell their properties within stipulated time periods will be reduced. Previously, properties sold within a year of purchase were subjected to a 16 per cent seller’s stamp duty (SSD), the rates are at a staggered 12 per cent for properties sold within 2 years, and at 8 per cent and 4 per cent for those sold within 3 and 4 years respectively.

SingaporeskylineThe new tweaks to the regulation means that sellers now only have to pay 12 per cent stamp duty for properties sold within a year, and then at the staggered rates of 8 and 4 per cent for those sold within 3 and 4 years respectively. Whiles some buyers might have missed out on this new ruling by a day, the effect of the change on buyers who have purchased for the long-term will be minimal. This slight change in the property cooling curbs may provide a more fertile environment for property investment and some buyers may be interested in making headway with a second or subsequent property.

Whether this will boost home sales this year remains to be seen, but property analysts are expecting a slow and muted effect on the market. While the change may not translate to actual figures, with property analysts expecting only a 3 per cent increase on the previously projected 8,000 property transactions for 2017, what it does create is an atmosphere of positivity and a sense of hope. Any tweak by the government, however slight, could be seen as an indication of the market bottoming out, and following a period of market stabilisation, investors are hopeful that the market will eventually recover.

January’s private home sales plateau

After a slight rise of 0.1 per cent in December, January’s completed private home prices remained flat. There were some rise and fall in the different districts but overall, non-landed residential property prices evened out on a plateau.

CreekBukitTimahThat may not necessary be a negative as signs of stabilisation are generally expected of the year. Property analysts say that some of the zero per cent month-on-month change could also be due to the availability of smaller units with a higher psf pricing schedule. Besides shoebox apartments, studios and one-bedders, family-size units in new developments are also now smaller in size than before.

Small apartments aside, prices of completed condominium units in the central region did rise 0.7 per cent after a 0.3 per cent dip in December. In the non-central regions however, prices went the other direction with a 0.6 fall following a 0.5 per cent increase the month before.

26NewtonThe private real estate market could however be looking at more resale properties entering the pen soon as most buyers who have purchased investment properties in 2013 will have completed their 4-year holding period this year. This means they are no longer tied down by the cooling measure which requires them to pay a seller’s stamp duty should they sell their property within 4 years following the purchase. Whether the sector is ready for this influx of properties while pulling themselves sluggishly out of the lull remains to be seen.

Private resale property market to cruise on status quo

2016 proved to be a roller coaster year for the private home market, as prices fluctuated throughout the year but never quite settled into an upward swing. Price increases lasted hardly a quarter before turning the opposite direction and movements differed between regions as well.

SeletarParkResidencesAcross the board, resale private home prices rose 0.1 per cent. Most of the increase were for properties in the prime districts. Prices here rose 1.8 per cent while falling 0.9 per cent and 0.4 per cent in the city fringe and suburban districts respectively. Location continues to rule buyers’ decision-making process and prime district home prices remained stable despite the year-end lack of market activity.

As the rental market continues to wane and competition from completed properties put further pressure on rental prices, more private condominium unit owners may be pushed to sell this year as they come to the end of their 4-year holding period, after which they will have to foot their sellers’ stamp-duty bill. Buyers of resale units could have the upper hand when it comes to negotiations in these cases.

NathanResidencesThe number of private apartment units sold have been falling as well, with 484 units sold as compared to the 618 sold in November. Though the numbers are higher than the 453 units sold in December 2015, it is still a far cry from the 2,050 in April 2010 – a 76.3 per cent fall in fact. Property analysts are expecting prices and sales volume to maintain their current levels, though 2017 could be more a year of keeping the status quo than quick recovery.

Hong Kong’s property prices expected to rise further

As one of Asia’s, if not the world’s, most expensive cities to live and work in, it comes as no surprise that the real estate in Hong Kong is one of the world’s costliest.

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Photo credit: www.onekt.com.hk

Despite the Hong Kong government‘s repeated attempts to cool the market, with implementation of stamp duties and laying down of other purchasing restrictions, property prices in Hong Kong have continued to climb. And things could be heating up even more this year as even Mr Li Ka Shing, the country’s richest man, predicts the market still have room for property prices to climb further. In November last year, private property prices reached a peak unseen since 1979 when the data was made available by the city’s rating and valuation department.

Although there has been some political unrest, mostly civil, in the city and interest rates have been on the rise, there is still space apparently, for slight rise in prices this year. It will not be a smooth ride up, but there will be increments made nonetheless. China Overseas Land and Investment for example has listed the prices of their latest private residential development in the former Kai Tak airport area for almost 20 per cent higher that the same which were sold in August. In a city where liveable land is scarce, developers have been known to pay exorbitant prices for land sites, for example the record ids for sites in the same Kai Tak airport area for US$1.8 billion or S$2.58 billion.

 

Chinese top buyers of Singaporean properties

Foreign interest in local properties have not waned despite rising prices and supply over the past half a decade. Their appetite have not diminished, if at all. Transactions may have shrunk slightly due to the additional costs involved in foreign-purchases of properties in Singapore, put in place by the series of property cooling curbs rolled out since 2011, but they buyers are back in the market in search of potential sites and units, in particular buyers from mainland China.

skyline-residencesIn a year-on-year comparison, foreign property transactions were up 11.8 per cent and this excludes purchases by permanent residents. Besides the Chinese, other major buyers hail from Malaysia, Indonesia and the United States. Each group have their preferences as the numbers show. Chinese buyers mostly favoured suburban properties while Malaysia and Indonesian buyers went for core central region units. 68 per cent of Indonesian buyers and 40 per cent to Malaysian buyers purchased homes in the prime districts while 58 per cent of transactions from the Chinese were for homes outside of the core central districts. Most Indonesia buyers are willing to pay $2,000 psf and above for prime properties while Chinese buyers usually went for properties priced between $750 to $1,700 psf.

Marina ONe iprop watermarkThe Additional Buyers’ Stamp Duty (ABSD) may have been a deterrent at one point in time, but as the government made clear that the measures are here to stay, acceptance is beginning to truly sink in and buyers are willing to spend the additional amounts in exchange for long-term capital gains. Buyers from the United States are exempt from the ABSD due to a free-trade agreement and this has raised the number of buyers up from 1.1 to 7.3 per cent over the past 5 years.

 

Property market slowdown reflected in stamp duty collected

In 2014, the property stamp duty assessed was at $4.11 billion. This year, the total amount for the period ending March 31 was 28 per cent lower at $2.96 billion. Property prices and transaction volume have also fallen since the peaks of 2009 and 2013.

TheOceanfrontThe real estate market here has hit a number of speed bumps over the past 3 to 4 years and with the various cooling measures in place, buyers and investors have shied away from this previously almost-surefire means of investment. Introduced almost 5 years in December 2011, the Additional Buyers’ Stamp Duty (ABSD) has gradually taken effect on the market, perhaps in particular the luxury property sector which used to attract mostly foreign investors. With the 15 per cent ABSD imposed on them, and 7 to 10 per cent on Singaporeans, many may have thought twice about buying a second or subsequent property as the additional monies to be paid are considerable.

Much of the ABSD assessed came from share transfer from bulk purchases by non-Singaporean entities or shareholders who may have to let go of unsold units before they are hit by the Qualifying Certificate (QC).

marinacollectionBut with the current financial and economic climate hazy at best, the future of other investment products fairly volatile, and local property prices having fallen to affordable quantum levels, could more buyers be picking off units to secure more stable future yields?

 

Hong Kong’s red-hot real estate calls for new cooling measures

The pace and amplitude of Hong Kong’s rising property prices, in particular over the last couple of years, have seen the authorities taking proactive steps to cool it. Despite a move to increase stamp duties 3 years ago, prices have continued to climb. In September this year, prices surged once more, after 6 consecutive months of increase, to clock at a record high for the year.

hongkongpropertyHong Kong is already considered one of the most expensive Asian cities to live in, and current cost of real estate plus the high standard of living, has placed many housing options out of reach for the average citizen. Now, with experts predicting further price increase for the rest of the year, the Hong Kong government has once again raised stamp duties on property transactions.

Stamp duties will be raised 15 per cent for all transactions, up from the current 8.5 per cent. This change only affects citizens however, as foreign buyers are already paying a 15 per cent stamp duty. This will hopefully deter property flipping for the populous though the wealthy may still transact within the luxury property sector. ManyWi mainland buyers prefer to hedge heir funds in the Hong Kong real estate sector and have thus negated the effect of the Hong Kong government’s properties cooling measures.

The_Mediterranean_Hong KOngTo help the common man secure housing, first-time home buyers will only be charged a maximum 4.25 per cent stamp duty, dependent in the property value. This latest move is one of the government’s attempts to cool the red-hot property market before financial instability sinks in and causes more chaos to their economy.

 

Increasing difficulty in securing Australian home loans

Foreign property buyers hoping to snap up homes in Australia may find it increasing harder to secure home loans from Australian banks. The major Australian banks such as Commonwealth Bank, the National Australian Bank (NAB) and Westpac have further tightened loan restrictions to non-residents.

Sydney NSW skylineIn June this year, foreigners buying properties in New South Wales (NSW) have to now pay a 4 per cent stamp duty surcharge. In the state of Victoria, stamp duties have been raised this month to 7 per cent from the 3 per cent which commenced last year. Queensland may soon implement a 3 per cent foreign property surcharge as well, with a projected commencement date of October this year.

Foreign property buyers have come under the hammer of late, with citizens raising concerns about rising home prices, especially in popular cities such as Melbourne, Sydney and Perth. Mainland Chinese buyers were the largest investors, spending A$24 billion in the property market last year, doubling that of A$12 billion in 2014.

The National Australian Bank (NAB) and Westpac are however still Sydney Surrey Streethelping Singaporean investors secure loans via their Singapore offices, though they are careful to alert clients to the total debt servicing ration (TDSR) framework which still applies. There are also other sources of home financing, including private lenders though additional information and documents, such as bank statements and income slips, will be required.