Since the cooling measures were introduced by our government, the number of foreigners purchasing or investing in Singapore has been dropping.
For 2016, we foresee that the Singapore property market will further deteriorate from current market conditions. Since the cooling measures were introduced by our government, the number of foreigners purchasing or investing in Singapore has been dropping.
Why is this so? If a foreigner intends to purchase a property for his/her own uses or as an investment, they will have to pay a 3% + 15% ABSD (Additional Buyers Stamp Duty) = 18% of the purchase price. For example, if the foreigner is buying a $2M apartment then the stamp duty to be paid will be $360,000 SGD. Because of this, the whole property market has been badly affected. As a result, everyone is waiting for the possibility of this curb being withdrawn soon to ease the market. However, there has been no indication of any change at the moment.
Because of this situation, many Singaporeans have been investing their money in other countries, especially Australia. As Australian real estate is still an affordable asset, it has been interesting to many neighbouring countries. Generally, the Singapore market is also affected by global economic sentiment. However, we are expecting this to settle down by around June 2016. We should see the property market make a possible bottom out level and a slow turn back starting in the third quarter of 2016.
Currently, the rental market in Singapore has also fallen, which benefits the expatriates in Singapore with more choices. Rentals on renewal status have now seen a big 10 per cent - 20 per cent reduction depending on the type of property and location. There is an oversupply in the outskirts so the rental market is sluggish, but the prime district areas are still in demand, although prices have come down. In general, we are looking for a better year ahead despite the current market situation.