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The recent cooling measures which require foreigners buying private property in Singapore to fork out an additional 10 percent stamp duty, is expected to curb skyrocketing property prices.
And if recent transacted prices at certain luxury developments are anything to go by, the new measures could not have come at a better time.
A prime example is The Marq on Paterson Hill. The latest deal involved a 2,950 sq ft unit on a high floor which was sold to a European buyer for a whopping S$6,850 psf, a new record for Singapore’s condo market.
The average transacted price at The Marq is S$4,477 psf, making it the most expensive condominium in Singapore. Not far behind is Scotts Square, which averages at S$3,988 psf.
According to Stuart Chng, Group Division Head at Savills Residential Pte Ltd, ultra high net worth individuals are likely responsible for the record psf prices and despite the new measures, these buyers and investors are unlikely to be affected.
Long-term however, Chng foresees that transaction volumes in the private residential market will decline.
“We may witness less of such deals. With the ABSD (additional buyer’s stamp duty), the entire property market is likely to cool down as a result of psychology and purse-strings. There is a natural tendency to adopt a wait-and-see attitude as everyone is wary of how the measures would impact property prices.”
Prime suburban rents will continue trending upward, increasing by as much as three percent, underpinned by stable shopper traffic and population growth, according to Singapore Business Review.
Defying recession fears, the report said that Singapore’s retail market will continue to grow this quarter, with Orchard Road welcoming an additional luxury mall, Scotts Square, which features international retail brands like Michael Kors and Leonard Paris.
The report also noted that several international retailers are on the hunt for prime space in Singapore, particularly at Orchard Road. However, the declining supply of available retail space has put their plans on hold, similar to local retailers who are looking to expand into well-located suburban malls.
Suburban and prime Orchard rents climbed just one percent to S$30.8 psf and S$35.5 psf per month in Q4 respectively. This was due to weaker sentiment, though downside risks were mitigated by healthy leasing demand.
With market uncertainties looming, the report noted that prime rents on Orchard Road may stabilise, although off-pitch space may slide five percent, leading to an average drop of three percent.
