Why the ABSD is music to many ears
By Tejaswi Chunduri (courtesy of PropertyGuru)
PropertyGuru's latest Affordability Sentiment Survey results highlighting consumers' sentiment towards Singapore's property market, taken after the latest cooling measure kicked in, was released this past week. Carried out in collaboration with Blackbox Research, a market research firm in Singapore, the survey polled over 3,000 respondents.
The results show that the majority of respondents welcome the additional buyer's stamp duty (ABSD) announced in early December. More than half the respondents are optimistic that property prices will decrease in the next six months due to the impact of the ABSD. Almost 30 percent feel the ABSD will have a positive impact on Singapore's real estate climate while 22 percent remain undecided. As a result, almost 45 percent of those surveyed are adopting a 'wait-and-see' approach before venturing into the property market.
In addition, other survey data shows that perception towards a residential property price drop has risen by 10 percentage points while the number of respondents feeling the same towards cash-over-valuations (COVs) has grown by eight percentage points.
With an additional stamp duty of 10 percent put on foreigners acquiring any residential property, private property buying sentiment among overseas nationals is expected to be affected, resulting in reduced demand and a probable price correction in the market.
Notably, 54 percent of respondents feel that the government is not doing enough to keep property prices in Singapore affordable, a six percent drop in pessimism from the 60 percent recorded in the previous survey.
Meanwhile, investors looking to avoid the additional three percent ABSD on a third residential property might look for alternative property investments. 15 percent of respondents are willing to explore the commercial property sector and recent transactions show many investors are looking at more affordable office spaces such as shophouses.
In addition, 26 percent of those surveyed are interested in investing overseas. Malaysia, Australia, Hong Kong and the Philippines are the most popular overseas destinations.
By looking at the survey results, it seems that the latest cooling measure will help restore a stable and sustainable property market in the near future. But the big question remains - Is property affordability here within reach?
Do you believe that the ABSD will help make homeownership more affordable to Singaporeans?
Do write to me at: research@propertyguru.com.sg
Tejaswi Chunduri is a real estate analyst with PropertyGuru.
