Investors may shun property – What this means for genuine buyers
Feb 02, 2012
Sheena Chua
|
 |
True to the word of eagle-eyed industry watchers, Singapore’s property sector could be losing its appeal as a lucrative investment source.
(Investors might be losing interest in property, but that may not equate a fall in prices. Image courtesy of Thinkstock.)
One such observer is DBS Group Research, who told The Straits Times the implementation of the latest cooling measures in December last year—especially the additional buyer’s stamp duty—was a move that could affect demand and investment strategies.
December 8 last year saw the implementation of an unprecedented additional buyer’s stamp duty of 10%, imposed on foreigners purchasing private homes. It was widely recognised as a move by the government to specifically target and restrict foreign property investors.
Some analysts say potential property investors are generally adopting a wait-and-see attitude, and are widening their options to other investment sources like stocks. Said Lorraine Tan, director of Asia equity research at Standard and Poor’s to The Straits Times, “The property curbs limit the speculative element in investing in properties. When you don't have that and there is expectation that prices could come down, it's going to affect buying.
“As equities are more liquid, the money will get channelled into equities.”
Similarly, head of research and consultancy at Chesterton Suntec International Colin Tan commented, “Most people who have held back buying properties could invest in the stock market. There are lots of funds swirling around from one asset class into another.”
Meanwhile, there are investors who still prefer to remain in property, just not in Singapore. Managing director of Singular Asset Management Teoh Kok Lin said that while the stamp duty deters foreign buyers, property purchases are still “likely” should these investors choose to channel their cash to property markets in other countries.
As property investors begin dispersing to the stock and overseas property markets, what does this mean for genuine homebuyers? Will prices experience a widely anticipated plummet?
Not according to Chesterton Suntec’s Colin Tan, who thinks price falls in the local housing sector might not happen any time soon. He reasons, “There's too much liquidity in the market and borrowing costs are low.” His verdict: “I don't think property prices are coming down soon, not even in a slow growth environment.”
On the other hand, DBS Group Research told The Straits Times it expects transactions to slow and prices to retrace 5% with the help of the low interest’s rates. Said the research house, “Owner-occupier buyers are likely to hold back in anticipation of a dip in prices.”
|
|
|
|
|
Related Categories: Market Reviews & Market Outlooks, Private Residential
Tags: buyer's stamp duty, cooling measures, effects, Foreign buyers, private housing prices in Singapore, property investment, property investors, real estate investment, Singapore private housing market, stamp duty
Bookmark:
|
|
|
|
|
|
