Friday, February 27, 2015

Ease stamp duties on high-end properties: REDAS

By Eileen Poh, Reporter, Channel NewsAsia

27 Feb 2015

The Real Estate Developers' Association of Singapore (REDAS) says the Additional Buyers' Stamp Duties in the high-end retail market "runs counter to the Government's efforts to encourage foreign investment flows into the country".

SINGAPORE: In its latest call for the Government to scale back on property cooling measures, the Real Estate Developers' Association of Singapore (REDAS) took aim at the imposition of the Additional Buyers' Stamp Duties (ABSD) on the high-end real estate market.

Speaking at its Lunar New Year celebration lunch held at Shangri-La Hotel on Friday (Feb 27), REDAS President Augustine Tan said the high-end market is "not a segment the Government needs to safeguard".

"Not many Singaporeans are buying into this segment, and prices have indeed come down substantially. The imposition of ABSD on this segment runs counter to the Government's efforts to encourage foreign investment flows into the country, to activate the economy, grow investments and create jobs for Singaporeans," said Mr Tan.

"Some high net worth foreign investors, who create jobs for Singaporeans and who have many choices of where they want to be from the world over, now feel that they are not welcome in Singapore," he added.

Turning to vacancy rates, Mr Tan said the estimated supply of more than 75,000 completed private residential homes from 2015 to 2019 will bring the rate to a "new record high". This will lead to a further slip in home rentals and prices, he said, impacting homeowners and investors.

Official figures put the vacancy rate of completed private residential units, excluding Eexcutive Condominiums, in the last quarter of 2014 at 7.8 per cent, up from 7.1 per cent in the third quarter.

[OK, first I need to declare my interest in this. I would like the govt to ease up on the ABSD (and other cooling measures) as it would be advantageous to me. I think. 

That said, I am always wary of calls by special interests groups. 

Certainly REDAS wants a climate where they can easily sell property regardless of the costs to SC.

The property market is a two-edged sword. You want prices low to help those who want to buy, but you don't want it too low or you hurt the sellers. More importantly, if it is too low, sellers leave the market and no sale. That is BAD for REDAS.

Now, do you see where they are coming from?

In any case, REDAS is blind to other issues. Easing on the cooling measures like ABSD alone is NOT going to help. Prices are lower. Isn't this good for HNWI to buy then? Never mind the ABSD. If prices are falling and people are NOT buying it means there is NO demand. Not that there is a tax.

And the reason why there is NO demand is because the government has had to curtail the inflow of foreigners since the last election. Because of public sentiment.]

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