The Monetary Authority of Singapore said the property cooling measures remain necessary given that the underlying demand for private residential properties continue to be firm amid a persistently low interest rate environment and foreign investors looking for good yields.
MAS managing director Ravi Menon revealed that private home prices dropped by almost 12 percent during the last 14 quarters after increasing by nearly 60 percent over 17 quarters.
But with recent property launches registering good take-ups, he noted that transactions jumped by almost 40 percent in Q1 2017 from the average quarterly transactions since the Total Debt Servicing Ratio (TDSR) was rolled out in 2013.
As such, he believes that “easing the measures now would send a wrong signal”.
“The risk of a renewed unsustainable surge in property prices is not trivial,” said Menon.
In fact, the city-state must guard against a spillover of investor demand as the property markets within the region have been buoyant and their respective governments introduced cooling measures in recent months.
Tenants can now lease private homes for at least 3 months
The minimum rental period for private residential properties has been reduced to three months from six months previously, the Urban Redevelopment Authority (URA) announced last Friday (30 June).
The revision took effect immediately and has replaced the minimum stay duration of six months, which was implemented in 2009.
However, short-term rentals of less than three straight months, including those arranged via online home-sharing platforms like Roomorama and Airbnb, are still not permitted.
For visitors that need to rent for less than three months, serviced apartments and hotels will continue to serve to their needs.
According to the URA, it decided to revise the minimum rental period after holding a public consultation on the issue in 2015, as the majority of the respondents were in favour of a lower duration.
While it has taken a beating from the government’s property cooling measures in recent years, luxury home prices in Singapore are now showing signs of recovery, reported Bloomberg.
In fact, luxury home sales had been on the upswing even before some of the cooling measures were eased by the government in March, said Guocoland group managing director Cheng Hsing Yao.
Guocoland is set to launch its 450-unit Martin Modern project, which is nestled on a site it acquired for S$595 million last year.
“Demand is there, with lots of people waiting on the sidelines,” he said. “Prices have bottomed, and we can see a slight firming up already.”
According to Cushman & Wakefield, luxury homes refer to houses in prime districts measuring at least 2,000 sq ft. and priced from S$1,500 per sq ft. The broker noted that the prices of such homes fell by 15% to 20% from their 2013 peak.
And given the narrowing of the price gap between mass market and high-end homes, the relative value of luxury properties is now attractive, he added.