Industrial Property Prices to Rise
The first cooling measure in Singapore’s industrial property sector has kept things unusually quiet with industry property prices being pretty low at present. However, most experts think that there is going to be no further drop in these prices. In fact, there are also many of these experts who believe that these prices can increase by as much as 15% in 2013.
Having said this, there are a few who believe that some corrective work is still required in the industrial property sector. The introduction of the Sellers’ stamp duty on the purchase of industrial property has taken place for the very first time on Singapore soil. A total of 15% duty will be imposed on any property that is sold during the first year of purchase. Similarly, a duty of 10% will apply in the second year and 5% in the year after that.
The most recent cooling measure in the industrial property sector came in the light of increased speculation in the sector in 2012. The prices of industrial property have doubled in the past 2-3 years, a phenomenon that has even outpaced increases in rent of these spaces. In fact, the urban redevelopment authority stated that property prices increased by a third in the third quarter of 2012 when compared to the initial part of the year.
However, unlike Additional Buyers’ Stamps related to residential property, the stamp duty (sellers) will not hold from the fourth year onwards. The buyers can sign on the dotted line without worrying about any additional costs.
The release of new industry based land supply by the government is expected to dampen property rates of industrial lands. Additionally, many other experts cite the oversupply in several industries based strata units to be a deterrent to industrial property rates. However, the general consensus still leans in favour of an increase in these prices.