Residential Market News Extract - 11 July 2012

Foreigners, firms now form 7% of home buyers

Cooling measures have slashed the proportion of private homes bought by foreigners and companies and largely driven speculators out of the market.

National Development Minister Khaw Boon Wan stated that foreigners and firms account for just 7 per cent of total private home purchases now.

This is a striking drop from last year when the proportion was 20 per cent.

The minister, who gave a written response to a question from Nominated MP Tan Su Shan, also noted that 'the market is moving towards a more stable and more sustainable path'.

He said the ramp-up of public and private housing supply and the cooling measures have yielded encouraging results.

The latest cooling measure included the additional buyer's stamp duty introduced in December, which imposed an extra 10 per cent stamp duty on foreign and corporate home purchases.

The growth of mass market home prices slowed to 0.4 per cent in the second quarter this year, compared with 1.1 per cent in the previous quarter.

Overall, private home prices also moderated significantly, up just 0.3 per cent in the first six months of the year. Last year they rose 6 per cent.

The relatively low volume of sub-sales indicates that short-term property speculation has also plunged.

Source: The Straits Times – 11 July 2012