Singapore launches new realty market measures

Owners who sell houses and apartments less than three years after buying them will have to pay a duty of three percent of the resale value — a measure previously applicable to transactions within one year of the purchase.

For buyers with at least one outstanding loan, the minimum cash down payment was raised from five to 10 percent of valuation, while the maximum amount a bank can lend was capped at 70 percent, down from 80 percent.

The balance of the purchase price can be taken from pension savings.

The measures, which take immediate effect, are designed to discourage “flipping” — buying properties on easy credit with low cash down payments, and then reselling them quickly for profit.

They were announced as a traditional lull in the property market in August was about to come to an end.

“The government's objective is to ensure a stable and sustainable property market where prices move in line with economic fundamentals,” said a joint statement from the central bank and ministries of finance and national development.

“The property market is currently very buoyant,” it said, adding that the new measures were designed to “temper sentiment and encourage greater financial prudence among property purchasers.”

Properties in land-scarce Singapore are now among the most expensive in Asia, boosted in large part by the building of two massive casino complexes that opened this year.

A typical three-bedroom suburban apartment of around 100 square meters (1,076 square feet) that will be ready for occupancy in only two or three years now costs at least US$1 million.

Latest available government data showed property prices rose 5.3 percent quarter-on-quarter in the April-June period, albeit slower than the 5.6 percent jump in the March quarter.

Even during the recession last year, private property prices rose 1.8 percent despite government measures to dampen the market.

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