News ID: 217920
Published: 0802 GMT July 07, 2018

Singapore moves to cool down resurgent property market

Singapore moves to cool down resurgent property market

Singapore raised buyers’ fees and tightened loan requirements from Friday to cool a resurgent property sector, warning that rising prices could be destabilizing amid climbing interest rates.

Private residential prices in the affluent city-state have surged by 9.1 percent over the past year on strong demand after declining gradually for close to four years, the government said, according to AFP.

A statement, issued jointly by the central bank and the ministries of finance and national development, warned that the rise in property prices must not “run ahead of economic fundamentals.”

Allowing prices to surge unchecked could “raise the risk of a destabilizing correction later, especially with rising interest rates and the strong pipeline of housing supply,” the statement added.

The government raised by five-percentage points the additional buyer’s stamp duty (ABSD), a fee applied to the purchase price or current market value of a property, for Singapore citizens and permanent residents buying a second and subsequent house.

Citizens buying a third home and permanent residents buying a second home will now pay 15 percent in ABSD fees.

Foreign individuals buying any residential house must pay 20 percent and foreign entities 25 percent.

The loan-to-value limits for property purchases were also tightened by five percentage points.

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