Will this lead to a market correction? Let’s find out.
Bullish Sentiment to Continue
this measure impacts mainly higher-end homes, a minority of the entire property supply. The Ministry of Finance also highlighted that 93% of owner-occupied property will not be affected by the higher property tax.
Higher Rental Rates
We expect landlords to pass the increase in costs to tenants, especially in the current positive rental market. Landlords who aren’t affected might also raise rents and this could cause a general rise in rental rates.
Change in investment Strategy
Net rental yield for residential properties will be reduced. Hence, we expect that investors could turn to commercial/ industrial properties for rental play. This trend could also be made stronger due to the recent increase in ABSD.
