OCBC assesses the potential effect of property tax adjustments on the property market and buyers
OCBC Investment Research believes that recent property tax changes in Budget 2024, specifically the revision of annual value bands for owner-occupied residential properties from January 2025, are unlikely to significantly influence potential homebuyers’ decisions. Although the move will result in lower or unchanged property tax bills for homeowners, it is not expected to be a key factor in the purchase of homes.
The budget also includes a reduction in the Additional Buyer’s Stamp Duty (ABSD) clawback rate for developers who can sell at least 90% of a project’s units within the specified timeline. While this adjustment may provide developers more flexibility, it is not seen as a substantial relief, particularly since developers must still meet the 90% sales threshold.
OCBC anticipates that these measures will have limited effect on overall sentiment in the property market. In the longer term, OCBC forecasts a modest price increase of 1-3% for private residential properties in 2024, along with a decline in private home rents by at least 5%. The research team also expects private new home sales to remain within the range of 6,000 to 7,000 transactions.
