Why there's no reason to further ease property measures

A multi-year relaxation trend of current property curbs is predicted to begin.

There may be more behind the strong developer sales recorded in March.

Data released by the Urban Redevelopment Authority revealed that new private home sales shattered records and reached 1,780 units, up 111% higher versus last year.

According to DBS Vickers Securities, this is due to robust selling rates for new property launches. The improved sentiment was boosted by the recent government relaxation of seller stamp duties (SSD). This resulted in potential buyers becoming more willing to commit to an investment purchase given that their “holding period” have been reduced from four years to three.

The gains since the announcement of this came about from optimism that the easing of SSD may well signal the start of a multi-year relaxation trend of current property curbs that will mean continued sector-wide re-rating opportunities.

"Therein lies the irony – given the strong March new home sales figure, we see no reason why the Singapore government should announce further easing of property measures anytime soon, especially those targeted at buyers such as ABSD or LTV limits," DBS Vickers Securities said.

The Singapore government reminded that the current property measures are necessary to “promote a sustainable residential property market and financial prudence among households”

"We think investors’ euphoria regarding the start of a multi-year relaxation trend of current property curbs will fade in the weeks/month ahead," it noted.