ST : S'pore not likely to see HK-style property curbs

Nov 23, 2010

S'pore not likely to see HK-style property curbs

Market not as bubbly and recent measures still taking effect: Analysts

By Cheryl Lim

THE new cooling measures aimed at taking the heat out of Hong Kong's sizzling property market are unlikely to be inflicted on Singapore any time soon, according to industry experts.

They believe Singapore's market is not at the same frenzied level as in Hong Kong while recent steps brought in by the Government here need time to take effect.

The Hong Kong measures have targeted speculators with a sliding scale of new stamp duties.

Restraints on lending, mostly directed at the luxury end of the market, have also been put in place.

If these steps do not help deflate the asset bubble that is clearly building, harsher measures are almost certain to be put in place, as hinted in Hong Kong Financial Secretary John Tsang's official blog on Sunday.

While both Singapore and Hong Kong have similar characteristics - they are dynamic avenues for foreign investment, have scarce land and compete to attract rich investors - analysts say such steps are not likely to be on the cards here.

'It's unlikely the Government will simply follow what other governments are doing,' said Ms Tay Huey Ying, director of research and advisory at Colliers International.

'Singapore's Government has shown itself to be very measured in introducing cooling measures; the steps taken have been trying to temper exuberance without countering demand.'

The Government imposed cooling steps in August that tightened ownership rules for HDB buyers, set new loan limits and increased the amount of time a home buyer must hold on to his property before reselling it if he wants to avoid paying sellers' stamp duty.

Dr Chua Yang Liang, research head at Jones Lang LaSalle, said Singapore is still a way off from needing Hong Kong-style measures.

He said several factors, including transaction volume and the rate of increase in prices, would have to undergo an 'unusual spike in demand' before the Government decides to turn the screw a little tighter.

Even if this happens, any further cooling measures that Singapore is likely to take will probably differ from Hong Kong's, he said.

Mr Mohamed Ismail, chief executive of property agency PropNex, said the policies introduced in August should be given time to take effect before the Government decides to act again.

He also believes that incremental changes to property policies are not the way to go.

'It creates instability in the minds of investors and destabilises the local market. Buyers will be kept guessing how often or how soon the policies will change...they will be more detrimental if they come in small doses.'

Keeping this in mind, the Government must strike a fair balance if and when it acts, Mr Ismail said.

'You don't want speculators to drive up prices, but you have to keep the property market exciting enough for investors to bring in the money.'

However, Ms Tay believes that introducing new cooling measures is unlikely to change the mindsets of Asian investors who have traditionally looked at property as investments.

'With attractive low interest rates, buyers are finding (buying property) more worth their while than parking money in the bank...unless cooling measures really impact affordability, property will continue to remain as an alternative investment.'

Data released by the Urban Redevelopment Authority earlier this month showed that developers had sold 1,058 private homes last month, excluding executive condominiums, an increase of 16.1 per cent from September.

cherlim@sph.com.sg