2. To curb any sentiment of speculative growth
The policy changes were probably introduced as a preventive measure to limit speculative growth, since more condos are due to obtain their Temporary Occupation Permit (TOP). For example, the number of subsale transactions might rise in line with the anticipated increase in private residential units securing TOP, which is projected to grow from 5,920 units in 2025 to 6,838 units in 2026 and further to 10,306 units in 2027.
Moreover, several new projects are expected to be launched in the coming months, and more land parcels are expected to be released for sale through the Government Land Sales programme. Lower interest rates will also make housing loans more affordable, spurring more buying activity.
Impact of measures
There may not be a significant impact on the market. Although the number of sub-sale transactions is higher than before the pandemic, the quarterly transactions have been on a downtrend over the past few quarters. Furthermore, most condominiums are purchased for owner-occupation, especially after the Additional Buyer’s Stamp Duty (ABSD) has been raised several times. Those who buy properties for their own use will not be affected by the increased SSD, as they are likely to stay in the property for the long term.
With the increased holding period for SSD, there will be fewer housing units listed for sale in the resale market. The reduced available housing stock may help to prevent an oversupply situation when more condos obtain TOP over the next few quarters. This will help maintain balance and price stability in the private residential market.