Singapore Market Update

Market Overview

  • Singapore consists only of one main island and 63 other tiny islands. Most of these islands are uninhabited.
  • Singapore is among the 20 smallest countries in the world, with a total land area of only 682.7 square kilometers. The USA is about 15,000 times bigger.
  • Apart from Monaco, Singapore is the most densely populated country in the world, with 6,430 people per square kilometer.
  • Singapore became the 117th member of the United Nations on 21 September 1965.
  • Symbolism of the National Flag: Red symbolises universal brotherhood and equality of man while white signifies purity and virtue. The crescent moon represents a young nation on the rise and the five stars signify the ideals of democracy, peace, progress, justice and equality.

Discount galore!

It may not be the best time to speculate in Singapore’s property market, but if you have money in your pocket and are looking to buy a home or second home for a long term investment, discounts can be had right now. Developers are said to be giving up to 5% discount on luxury residential properties coming on to the market in the first quarter of 2011 in reaction to recent government curbs on speculators. It was also announced that an increase of 22,000 apartments would be built in 2011 up from 16,000 in 2010.

Government cools it down

Following the lead of China and Hong Kong, the Singapore Government has announced new measures to discourage speculators looking for a quick turnaround. Stamp duty has risen to 16%, 12%, 8% and 4% for properties bought on or after January 14th 2011 and sold within the first, second, third or fourth years, respectively. Previously, private home owners would have to pay 3% stamp duty if their home was sold within three years of acquisition.

This has come on the tail of Government regulations in August 2010, when Prime Minister Lee Hsien Loong endeavored to cool down surging property prices that had risen a massive 38% in the second quarter of 2010 alone, making prices exceed those of the 1998 peak. He had announced that down payments on second homes to increase from 5% to 10%. Stamp duty to be imposed on property held for less than three years, up from one year. And buyers that own more than one mortgage can only borrow up to 70% of the property value, compared to 80% previously.

What does this mean?

Those with a limited cash flow will have to at look long term investments in the property market whereas cash rich buyers (whether local or from overseas) will have more choices as they can obviously afford to hold on to their properties. Although government intervention may have cooled down the property market, the 38% rise would in itself, have warded off speculation and thus have had the same results as the government interventions.