Singapore Wants To Cool Its Housing Market

Etienne Girardet/Unsplash

Singapore is alarmed by rapidly rising housing prices and just like the trick it pulled off in 2018, housing curbs are coming back. 

Coolants Of Choice?

• For citizens: Additional stamp duties for purchasing their second home raised from 12% to 17%; for the third and subsequent property, duties raised from 15% to 25% 
• For permanent residents: The rate for buying their second home raised from 15% to 25% and for the third and subsequent property, their stamp duties have been raised from 15% to 30% 
• For foreigners: Stamp duties raised from 20% to 30% 
• For entities: Stamp duties increased from 25% to 35%
• For developers: Stamp duty on purchase of residential projects raised from 25% to 35%
• For mortgage: The government will also tighten the total debt servicing ratio threshold to 55% from 60%. [This means that a person’s total monthly loan payments, including mortgages, cannot exceed 55% of the individual’s total gross income.]

A Housing Price Check Was Necessary

Per this report, private home prices have risen by about 9% since the first quarter of last year already. 

Also, the secondary market for public housing recovered sharply after a six-year decline, rising about 15% over that period. 

📈 Driven by demand from HNIs making a beeline for Singapore, home sales worth USD24 billion happened in the first half of 2021, double of what was recorded in Manhattan.  

Will The Curbs Work?

🎙 “The measures are something akin to pointing the gun to the sea when the enemy comes from the back. Many of the buyers are first-time buyers, so raising the stamp duties are ineffective as it has been shown.” - Alan Cheong of Savills Plc.