SPK: As mentioned in my earlier blog post, this increase in BSD rates is not going to hurt most of us unless you are going for a high-end property. In fact, prior to the Budget, the market was expecting the government to introduce more drastic measures to cool the heated enbloc market. This mild measure seems to be a good news for the market.
SPK: The transparency for REIT ETFs is definitely a good news for the SREITs and fund management industry. Currently, there are 3 REIT ETFs in Singapore, with a total AUM of S$250 mil and their dividend yield ranges from 4.12% to 4.75%. The tax concession should result in some uplift in their dividend yield and make the ETFs more attractive to investors.
Short-term impact of the tax concession on the SREIT sector may be limited due to the small AUM size of the REIT ETFs in Singapore. It will require some time before the REIT ETF sector grows to a substantial scale that is enough for it to exert greater influence on the SREIT sector. Nonetheless, the tax transparency will be a good start to grow the REIT ETF sector.
SPK: Singapore property stocks fell unexpectedly the day after the announcement of the hike in buyer’s stamp duty, despite the consensus view that the increase will not derail the housing recovery in Singapore. This was probably a knee-jerk reaction to the news and share price of developers managed to recover most of the losses the following day.
SPK: The collective sales market might be entering a cooling-off phase, as seen from the recent spate of collective sales attempt that ended without a sale being concluded during the public tenders. Developers were more aggressive in buying land last year. For most of the tenders, there were multiple bids and the majority of these tenders were concluded at a premium to the reserve prices.
Some of the recently sold sites like Brookvale Park and Pearl Bank Apartments did not manage to find a buyer during the public tender process. Nonetheless, they were able to secure a buyer via private treaty. This probably means that developers are still hungry for land. But developers might be more selective and cautious in buying land these days.