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The Jakarta Globe: Singapore has announced new measures to cool the city-state’s housing market, saying foreigners who buy private homes will have to pay an additional stamp duty equal to 10 percent of the property value.

Permanent residents who already own a Singapore home will pay an additional stamp duty of 3 percent when they buy a second and subsequent property, while citizens who purchase a third and subsequent home will pay 3 percent under the plans announced on Wednesday.

Residential prices in Singapore have held up well despite a slowing economy, helped by low interest rates and rising demand from overseas investors, in particular those from China.

Theses latest measures are, however, expected to have a significant impact.

“In the next one to two months or so, the home-buying demand from non-resident foreigners will almost dry up,” said Nicholas Mak, executive director of SLP International Property Consultants.

“From 1995 to 2006, about 10 to 20 percent of the private homes transacted in the primary and secondary markets were bought by non-Singaporeans,” he said. “In the first 11 months of this year, the percentage was 28 percent.”

Private home prices in Singapore rose 1.3 percent in the third quarter from April-June despite a raft of government measures to cool the housing market.

The still buoyant Singapore market contrasts with once-hot markets in China and Hong Kong where prices and transaction volumes have begun to fall. According to a private sector survey released earlier this month, average home prices in 100 Chinese cities slipped for the third consecutive month in November.

“Even with the current economic uncertainties, the demand for private residential property remains firm,” the Singaporean government said in a statement. “Private property in Singapore continues to attract investors, local and foreign.”

“Excessive investment demand will, however, make the property cycle more volatile, and thus increase the risks to our economy and banking system,” the statement added.

Land Sales Singapore said on Wednesday that it would release up to 29 sites for private residential property development in the first half of 2012, enough for about 14,000 homes.

Fourteen of the sites are on the government’s “confirmed list,” which means the land will be put up for auction regardless of market conditions.

The government said the new supply was slightly lower compared with the second half of 2011 due to the large supply of homes in the pipeline. Private property makes up about 20 percent of Singapore’s housing stock.

The remaining homes comprise government-built HDB apartments, which only citizens and foreigners with permanent residency status can buy.

Non-citizens make up about one-third of the city-state’s 5.2 million population.



Reuters