Which cooling measures are likely to be eased first?

Policies will be rolled back progressively.

Analysts and market watchers believe that property cooling measures are likely to be eased soon, on back of deteriorating economic conditions and the steady drop in home prices.

According to Maybank Kim Eng, the policies which are most likely to be eased in the near future are the Additional Buyers Stamp Duty (ABSD), loan-to-value ratio (LTV), and the Sellers Stamp Duty (SSD).

Maybank Kim Eng expects current ABSD rates for second/third home buyers among citizens and PRs to be lowered across the board. The hefty 15% ABSD imposed on foreign home buyers could also be reviewed as Singapore turns to foreign capital to soak up its market surplus.

“With current low rental yields, falling rents and rising vacancy rates, residential landlords could be affected. Hence, scaling down stamp duties could potentially lower the hurdle rates and bring back investment demand even with a difficult outlook,” Maybank Kim Eng said.

As for LTV, the report said that this requirement has become inessential after the implementation of the total debt servicing ratio (TDSR).

“This is because TDSR already ensures financial prudence, by capping total debt servicing at 60% of household income. Hence, we believe LTV could also be adjusted,” Maybank Kim Eng noted.

Lastly, the SSD is also likely to be tweaked, though not before the other measures are lifted.

“We believe SSD will not be the first to be lifted as this measure could ensure that speculative demand does not return during the unwinding process,” said Maybank Kim Eng.