Higher possibility of new property curbs, says expert

Compared to two months ago, the possibility that the government will implement a sixth round of cooling measures is now much higher, according to a report by The Business Times.

However, such measures will likely come in Q2 2012, according to Png Poh Soon, Head of Consultancy and Research at Knight Frank.

“A few months doesn't really constitute a trend so naturally, the government will look - it may take one to two quarters to observe if this is a sustainable trend or if (the spike in sale volumes) is short-term,” said Png.

Recent data from the Urban Redevelopment Authority (URA) revealed that a total of 2,413 private homes were sold in February, excluding executive condominiums (ECs). This reflects an increase of 29 percent month-on-month and more than double the figure seen over the same period last year. 

If ECs were included, the number soars to 3,138 units, 51 percent higher than the 2,077 units recorded in January.

Given the strong buying sentiment, the likelihood of a new round of cooling measures has increased. Over the last few years, a series of curbs have been introduced; the most recent being the ABSD (additional buyer's stamp duty) which took effect last December. 

“When the sixth round comes in, it could be a refinement of the existing five rounds of cooling measures, or it could be something drastically new. The way I look at it, it's likely a tightening of existing measures,” noted Png.

“The market is actually in mixed flux. The resale market is quite dead, (but) new sales are doing very well. Is this (a sign of) a very stable and sustainable market? This is a question many people are interested in.”