Will it happen?
Additional Buyer Stamp Duty, in short we call it ABSD, the aim is to cool down the property market. It was first introduced back in 2011 and thereafter there are few adjustments. However, all are not effective enough in bringing down the property prices to the expected level. It is only after the introduction of Total Debt Servicing Ratio (TDSR), the property market start to look gloomy.
Since ABSD is not as effective as TDSR, why are there still voices to remove or reduce the percentage?
Mr Khaw Boon Wan said the TDSR is a measure that encourage financial prudence and is here to stay. There is also a survey saying 2/3 wants property curb but seek relaxation of rules. Therefore, ABSD becomes the target for it to be removed.
Sellers now needs to reduce prices to attract buyers, any relaxation on existing regulation that can further protect their selling price is always welcome.
Buyer on the other hand is also hoping for the removal of additional buyer stamp duty. They realise now is the entry point for property yet they are holding back purchase as most do not want to pay extra tax.
Buyer and seller now sings the same tune. Rumours, speculation on when the relaxation of cooling measure will happen is a hot topic, some even suggest the dates around general election or as early as 2015. Others suggest ABSD to be reduce for citizen buying 2nd home, so we can have a comfortable life enters our twilight years. Well, our MP Ms Lee Beng Hua said we should not to be fixated on property, there is also stock and bonds to consider as part of a balance portfolio. One thing for sure, it will not happen now nor the very near future, our government want a soft landing but yet to find a suitable runway to do so.
Left pocket, right pocket
Should we wait for removal of ABSD before making any move? For 1st timer, don’t wait for that to happen. For the rest, decide for yourself.
As a buyer, you thought you can keep all the saving from the removal of ABSD? No, Is either to the sellers’ pocket or contribute to the building of nation.
Is a simply maths, seller or developer reduce prices because of todays market situation and many buyer are waiting for changes, if the selling price is too high, it will only compromise the deal. Now see it in another angle, any slight changes to the regulation, more buyer will rush into the market. With higher demand, how do you think the seller will priced their property?
Bare in mind, there are plentiful of buyer on standby for very ‘that moment’.
- Those who are cash rich, they want to add more property into their existing portfolio.
- Young professional who believe having brick and wall as their investment rather than paper.
- Those middle age who need to buy before their monthly mortgages increases due to shorter loan tenure.
Most of them share the same hope, removal of ABSD.
Analysed by Desmond Wong
Edited by Isis Neo
Disclaimer:
The above article are personal opinions of the author and reader discretion is advised.