No relaxing of property curbs means continued weak market: Analysts

SINGAPORE – With the assurance from the Government that the property cooling measures are here to stay, housing market sentiment will remain weak as buyers stay longer on the sidelines, said analysts yesterday.

This is because those looking to buy a new property can look forward to further downward price correction, after Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam said on Friday that there is room for more moderation before any tweaks are made to the curbs.

Mr Ku Swee Yong, Chief Executive of property agency Century 21, said: “Local buyers will definitely wait and see a little more. Foreign buyers hoping for a reduction in the ABSD (additional buyer’s stamp duty) might just buy now that they know it is here to stay, especially if they have decided on Singapore as their long-term home; but those interested to buy properties as investments might be chased away.”

Mr Donald Han, Managing Director of property firm Chesterton Singapore, said: “Those looking to buy property can hold back for more price correction. Good projects launched at a price lower than those sold in the vicinity will definitely see interest.

“But overall sentiment is still the status quo. Some relaxation of cooling measures was on the wish list (for this year’s Budget) and that will remain on the wish list,” he added.

Mr Tharman said in his Budget speech that it was too early to start relaxing the property cooling measures, given the rise in prices in the past four years.

The moves, he said, are meant to help moderate the market and prevent prices from getting “too far out of line” with income levels.

Mr Colin Tan, Director of Research and Consultancy at Suntec Real Estate Consultants, said the decision to keep the cooling measures provides clarity to the housing market in coming months.

“Some developers have been holding back launches to observe the market. Now, with this clarity, they can make a decision whether to hold back more or to launch. But sentiment will remain weak since nothing was done to change it,” he said.

Mr Tharman also said the property market would be closely monitored in the coming quarters and, if necessary, adjustments to the cooling measures would be made.

Mr Ku said the continuous downtrend in cash-over-valuation (COV) premiums of Housing and Development Board resale flats might lead to the Government taking its first step to relax the curbs.

He said: “The market is trending downwards, but not fast enough — it’s a gradual downtrend.

“But COV is going down very quickly and there are now more cases of negative COVs. If valuation also falls quickly, it might actually kick-start the process for (the Government) to make changes.”