At last the Government has acted: at least in the property market and seemingly to differentiate the benefits of being Singaporean, permanent resident and foreigner.
And the usual talking heads from the various “well-known” (at least media prominent) property broking firms give their usual obvious-as-hell comments. In other words, no real value-add 🙄
Let me your auntie give you my take.
Would the moves really restrain foreign buying? Well, in the GCB class, very few Singaporeans are competing with very few foreigners, as not every foreigner buying is your Jim Rogers. 🙄
So, if you are Auntie or Uncle Singaporean-XYZ and bought into a GCB recently in the hope of multiplying your millions $ gathering dust due to nonsensical interest rates, this is what’s likely to happen.
You will see the value of your GCB go down 10 or 15%, which can mean a smaller profit from your investment or even capital loss — it all depends on when you got into the game.
If you are in the Jim Rogers’ charm circle and looking to park your hundreds of millions into some solid assets in a jurisdiction that has law and order in capital letters, then you aren’t going to be deterred by a titchy-witchy 10% increase in transaction tax or, as we in SG call it, “stamp duty”.
Indeed, if the high value properties fall by as much as 15% (or even more), then Mr Big Bucks Foreigner isn’t going to be deterred or out of pocket. At worst, he pays no more than he would have paid had there been no state intervention.
In a more favourable scenario — from a cash-rich buyer’s perspective — a falling market could yield basement bargains. What’s a 10% stamp duty to the government if you need to pay the seller 20% less than you would have had to pay be4 Dec 8.
Hopefully our dear Min Fin had done some scenarios with the relevant algorithms to see where exactly the cookie would crumble and Singaporeans aren’t left holding the crumbs while foreigners end up with the auspicious readings 😆