Revised ABSD rules for upgraders, more GLS sites in OCR among PropNex’s Budget 2023 wishlist

PropNex Realty has put forward its recommendations for Budget 2023 ahead of the 14th February announcement. In the 12th January press release, the company suggested tweaks “to help certain segments of the population own homes and upgrade to a private property”. Ismail Gafoor, executive chairman and CEO of PropNex, highlighted that “the biggest hurdle” for many upgrading to private property is the Additional Buyer’s Stamp Duty (ABSD) payment – currently 17% for Singaporeans buying a second residential property. It was thus proposed that the rules should be more aligned to those applicable to those upgrading from HDB flats to Executive Condominiums.

In terms of supply, PropNex is calling for an increase in Government Land Sale (GLS) sites located in the Outside Central Region (OCR) under the 2H2023 GLS Programme. Although the 1H2023 GLS Programme contains seven sites on the Confirmed List, yielding 4,090 residential units including ECs, 2,120 of these are located in the OCR, which is lower than the 2,550 from the 2H2022 GLS Programme.

As such, PropNex recommends that the government inject more GLS sites into the OCR sub-market in the 2H2023 programme to ensure prices remain firm. Additionally, Build-to-Order (BTO) project waiting times could be reduced from the current four-year period down to three.

PropNex has also requested that the government provide more clarification on the wait-out period announced as part of the cooling measures rolled out in September 2022. Under this measure, private homeowners must now wait 15 months from the sale of their property before they can purchase Tengah EC an unsubsidised HDB resale flat. The wait-out period will not apply to those aged 55 years and above who are moving to a four-room or smaller resale flat.

In light of the announcement, PropNex is recommending further details be provided on this front. Gafoor states “we believe the injection of more OCR residential supply will play a part in keeping mass-market home prices stable in the future”, and hopes the government can update the Cooling Measure on its initial impact in the second half of 2023.