Singapore's Housing Market Has Lessons For Us All

It was back in 2009 when authorities in Singapore started working towards bringing down the property prices. As the measure got stricter and stricter by 2013, there was no scope for prices not to fall. Government data show that till last year (2016) property prices have witnessed a drop for 14 straight quarters, the longest slide recorded since authorities publishing data in 1975. The fall in prices encouraged authorities to relax some curbs. In March, authorities decided that sellers' stamp duty payable for residential properties would now only apply for three years; earlier, the seller had to pay the duty on properties sold after four years of purchases. “The rate of duty will also be lowered, to four per cent for properties sold in the third year, to a maximum of 12 per cent for dwellings sold within one year,” Bloomberg reported.

As a result of that, home sales in March saw the biggest monthly appreciation in four years. About 1,780 units were sold during the month, the highest since June 2013.  

This is interesting considering living in Singapore is not at all cheap. While it may not be as unaffordable a property market as Hong Kong, living here is certainly not affordable. Singapore tops a list of 133 nations at the Economist Intelligence Unit's Worldwide Cost of Living Survey.

However, at Demographia International Housing Affordability Survey, Hong Kong has remained the least affordable housing market in the world for seven years in a row –regulatory curbs haven't let affordability to deteriorate to the acute levels of cities such as Hong Kong. The Demographia report was released in January this year.

It is worth mentioning here that public housing in Singapore forms a large part of the overall property market – about 80 per cent. This has helped authorities keep a check on prices, similar efforts by authorities elsewhere did not yield similar results purely for this reason. In Hong Kong, for instance, public housing accounts for only 20 per cent of the total housing market. Private developers provide 80 per cent housing has been a major cause of skyrocketing of prices.