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Singapore remains attractive for the fact that it is stable with good protection of property rights and minimal currency risk. Hence, while some of them could be deterred, there will still be those who view the latest curbs as just another one-time tax on property that they are willing to pay. Additionally, given that the world is now awash with liquidity amid low interest rates and high inflation, property will likely remain a viable option for investable funds. Coupled with genuine demand from first-time buyers and HDB flat owners, there will still be support for demand for new homes.

In 2013, new home sales is expected to decline from 2012’s record high level on the back of the new set of market cooling measures effective from 12 January 2013. The measures, which were the most extensive to date since 2009, were introduced to arrest the re-acceleration of private property prices and record level of housing transactions fuelled by the pro-buying environment – low interest rate and excess central bank-created liquidity that threatens to flood the local property market.

With the measures, only Singaporeans buying their first properties will be spared from the new rules. In fact the pool of potential buyers will shrink given that many will be priced out due to the curbs, while others will stay on the sidelines to assess the impact on the market, their ability to purchase and the bearing on their planned investments. Additionally, some buyers may also postpone their purchasing decisions in anticipation of price corrections. The increased ABSD to 15% will also undoubtedly make property investment less attractive and deter foreign buyers planning to make the plunge.

Notwithstanding, for foreign buyers, Singapore remains attractive for the fact that it is stable with good protection of property rights and minimal currency risk. Hence, while some of them could be deterred, there will still be those who view the latest curbs as just another one-time tax on property that they are willing to pay. Additionally, given that the world is now awash with liquidity amid low interest rates and high inflation, property will likely remain a viable option for investable funds. Coupled with genuine demand from first-time buyers and HDB flat owners, there will still be support for demand for new homes.

In the light of the above, new sales take-up is expected to moderate from 2012’s record of about 22,000 to 12,000 -15,000 units in 2013. Notwithstanding, prices of private homes are not expected to correct significantly in 2013. Developers’ committed costs in land and related outlays, developers’ healthier balance sheets, ample liquidity and low interest rates will provide support to prices. As such, private homes prices are forecast to remain relatively stable with marginal downside, if prices slip at all.