The real Estate industry in Singapore has been on a roller-coaster over the years. The Asian financial crisis that took place in the late 90s was a major blow to the industry. While still trying to recover, another financial crisis in 2008 happened and also affected the real estate. After a crisis there is a tendency of real Estate properties almost doubling, this prompted the government of Singapore to take several measures to help stabilize the prices of real estate properties.
Real Estate Industry in Singapore
The government made it a law that the monthly debt payments should not be over 60% of borrower’s monthly income. This measure was introduced in June 2013 with the aim of reducing the number of loans taken to keep up with real estate trends. This law reduced the number of loans that were taken up and did a number on real estate in Singapore. Due to this measure the prices of real estate greatly declined since its implementation.
Stamp Duties for Properties Bought in Singapore
The government increased Stamp duties on bought properties. Stamp duty is the money that a new owner has to pay once they have bought property. The first S$180, 000 one was required to pay 1%, for the second S$18000 one was required to pay 2% and 3% of the remaining money was paid as stamp duties. This has greatly discouraged the buying of property, especially the expensive ones and has hence caused a decline in real Estate property prices. In particular, condos around the Tampines area is increasing and therefore measures have to be taken to reduce the property price to prevent an escalated prices that is priced out for the masses.
The government also increased Stamp duties on Short time buyers of property. At the peak of the real estate industry in Singapore, many buyers bought properties for a few years as they waited for the prices to go up and then sell them at a higher price. The government put in a policy that increased stamp duties on owners of property for less than 4 years. If one owns a property for less than one year, they had to pay stamp duties of 16%, one to two years 12%, two to three years 8%, three to four years 4% while there was no charge for selling property owned for over 4 years.
Measures Taken to Ensure a Sustainable Real Estate Market
These measures caused a major slowdown in the Singapore Real Estate industry and there were therefore calls for the government to loosen its policies. In March 2017, the government heed to the call and put in some cooling measures. Stamp duties for short time buyers was reduced to 3 years with the percentage decreasing by four percent in every category. The rule that the payment should not exceed 60% of monthly income was also scratched off for mortgage loans.
These measures saw an increase in property sales as compared to the previous years. The future of real Estate businesses looks bright with more and more investors coming in. t may not go back to its high price state it was a few years ago. These measures by government have made real Estate more affordable for young people and families as the prices are now more reasonable. With the government loosening its strict rules, the Singapore real estate business will sure pick up, with high demand and reasonable prices.