Singapore Property Sector - OCBC Investment 2023-04-27: Additional Measures To Curb Investment Exuberance

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Similar to the last round of ABSD hikes in Dec 2021, there will not be any increases for Singapore Citizens and Permanent Residents (PRs) purchasing their first residential property, but there will be higher ABSD rates for the second and subsequent residential property purchased.

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Entities and trustees also saw a 30 percentage points (ppt) bump in their ABSD rates from 35% to 65% for any residential property they purchase.

Housing developers will see no change to their ABSD rate, which is 40% overall, of which 5% is non-remittable and payable upfront and 35% is remittable but subject to conditions. However, we believe developers are still likely to turn more cautious on land tenders, given the still hefty penalties they will incur if they are not able to complete the housing development and sell all units of housing accommodation in the development within five years from the acquisition date. Hence, land price growth may become more tempered.

Aimed at managing investment demand and promoting a sustainable property market

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OCBC Research Team OCBC Investment Research | https://www.iocbc.com/ 2023-04-27 SGinvestors.io

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