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**Singapore's Revised Property Cooling Measures: Minimal Impact on Malaysian-Owned Projects**
Singapore has announced a new property cooling measure aimed at curbing speculation in the local real estate market. The revised Seller's Stamp Duty (SSD) now extends the holding period for residential properties from three to four years, with the SSD rates raised by four percentage points per tier. However, Hong Leong Investment Bank (HLIB) expects the impact on Malaysian-owned property projects in Singapore to be minimal.
The extended SSD holding period means that properties sold after four years will be exempt from the SSD. HLIB's analysis suggests that the impact will be most noticeable in the new launch market, especially for smaller units, which are more attractive to speculators due to lower prices and easier resale.
Despite the new measures, the overall impact on Malaysian-owned developers is minimal, as demand from genuine end-users and long-term investors remains robust. The cooling measures aim to reduce short-term flipping and speculative sub-sales, not to hinder genuine homebuyers or long-term investors. Most buyers, including Malaysian investors, tend to be owner-occupiers or long-term holders, so the longer SSD period is unlikely to deter their investments.
The policy reinforces Singapore's stance on viewing housing primarily as homes rather than quick investments, potentially increasing market confidence by reducing speculative volatility. HLIB maintains its "overweight" call on the property sector in Singapore, with IOI Properties Group Bhd, OSK Property Holdings Bhd, Sunway, and Sime Darby Property Bhd among its top picks in the sector. HLIB has set a target price (TP) of RM2.00 for OSK Property Holdings Bhd, RM4.05 for IOI Properties Group Bhd, and RM5.90 for Sunway.
The new measure, effective from today, targets speculative buyers who flip their purchases within three years. Sales beyond the four-year mark remain exempt from the SSD under the new measure. The new SSD rates are higher under the revised property cooling measure.
In conclusion, while the extension of the SSD holding period signals a more cautious government policy towards speculative activity, Malaysian-owned projects are likely to see minimal disruption, supported by sustained genuine demand and the relatively moderate nature of the new rules.
- The government of Singapore, through its revised property cooling measures, has extended the holding period for residential properties from three to four years, which means properties sold after four years will be exempt from the Seller's Stamp Duty (SSD).
- Despite the revised property cooling measures, the impact on Malaysian-owned developers is minimal, as demand from genuine end-users and long-term investors remains robust, including Malaysian investors who typically tend to be owner-occupiers or long-term holders.
- Hong Leong Investment Bank (HLIB) maintains its positive outlook on the property sector in Singapore, particularly for developers like IOI Properties Group Bhd, OSK Property Holdings Bhd, Sunway, and Sime Darby Property Bhd, despite the new SSD rates under the revised property cooling measure.
- The new SSD measure in Singapore, aimed at reducing speculative activity, is unlikely to significantly disrupt Malaysian-owned projects, given the sustained genuine demand and the relatively moderate nature of the new rules in the broader context of the Malaysian-Singapore economic relationship and the Malaysian business and finance industry.
