Why investment sales are likely to grow due to revised seller's stamp duties

The change is also expected to boost sub-sales transactions.

The downward revisions on seller's stamp duties (SSD) are likely to boost investment sales, as PropertyGuru chief executive officer Hari Krishnan foresees.

"This change will most likely benefit real estate investors looking to exit their investments after three years, as they will be able to place their properties on the market earlier, without the burden of stamp duties," he said.

The government decided to reduce the holding time of a property to three years to dodge paying for SSD. Currently, SSD is payable by those who sell a residential property within four years of purchase, at rates of between 4% and 16% of the property’s value.

“PropertyGuru is encouraged by the government's move to tweak cooling measures as a sign that the government is closely watching the sector, and seeking to ensure a healthy, thriving real estate market, whilst addressing concerns from homeowners and investors," noted Krishnan.

Moreover, he said this could also give a rise to sub-sales in the immediate term.

In the past year, private property sub-sales (homeowner sales prior to the issuance of the Certificate of Statutory Completion for the respective project) stood at 2.3% of caveats lodged with the Urban Redevelopment Authority.

"This was a decline from 2015’s 2.8%. In the immediate term, sub-sales are unlikely to rise, with the revisions only taking effect for properties sold from 11 March onwards, but will likely stimulate sub-sale volumes in 2018 and beyond," added Krishnan.