JLL reported on the budgetary measures that have an impact on Singapore’s property market which include :

1. Enhancing Proximity Housing Grant (PHG)

2. Raising top marginal Buyer’s Stamp Duty (BSD) rate for residential properties from 3% to 4%

3. Increasing GST from 7% to 9% sometime between 2021 and 2025

Residential

Proximity Housing Grant – a positive for the HDB resale market

Mr Ong Teck Hui, JLL National Director, Research & Consultancy says "The PHG for those buying a resale flat to live with their parents or children has been increased from $20,000 to $30,000. Those buying a resale flat to live near their parents or children will continue to receive a PHG of $20,000.

Singles aged 35 years and above who buy a resale flat to live with their parents will receive a PHG of $15,000, up from $10,000 previously while those buying to live near their parents will enjoy a PHG of $10,000.

More families and singles are likely to take advantage of the increased PHG leading to an increase in demand for resale flats. This could contribute to stabilizing HDB resale prices which has been on a mild downtrend."

Buyer’s Stamp Duty (BSD) increase unlikely to stall market recovery

Mr Hui went on to say that "The top marginal buyer's stamp duty rate for residential properties will be raised from 3% to 4% and will apply to the amount in excess of $1m of the property value. This change will take effect from tomorrow 20 February for all residential property transactions.

Taking a $1.5m property as an example, the current BSD payable is $39,600 but the new amount payable will be $44,600 ie $5,000 more. This absolute sum is not large and is merely 0.3% of the total transactional cost. As the bulk of residential transactions are below $1.5m, the effect of the BSD change on market demand is expected to be mild. However, the increase in the absolute amount payable in the BSD for big-ticket items would be more significant and some buyers might calibrate the increase in their purchases. The current market recovery is unlikely to be dampened by the slight increase in the BSD."

Retail

Delay in increase in GST is a short-term positive for the retail sector

According to Ms Tay Huey Ying, JLL Head of Research and Consultancy, Singapore "The announcement on the increase in GST from 7% to 9% is within expectations. However, the delay in this increase to sometime between 2021 and 2025 is a short-term positive for the retail sector, and in turn the retail property market.  Not only will the nascent recovery in consumer spending not be prematurely derailed, it could actually boost spending ahead of the increase in GST. This should bring cheers to retailers and in turn retail landlords, and their focus on raising productivity and investing in technology can continue without distractions. They should be in a better position to cope with the impact of the increase in GST to 9% when implemented three years or more from now.

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