Govt curbs on industrial property?

With the Additional Buyer Stamp Duty, Seller Stamp Duty, and lots of “hoo-haa” in the private residential property market, many investors, both local and foreign are turning to commercial as well as industrial property. So much so that some commercial and industrial property launches or mixed development have seen very good interest in the past few months.

So hints that the government may step in to prevent this market segment from over heating. The following is an article from the Today newspaper – 22 May 2012

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SINGAPORE – The demand for and prices of property here have remained buoyant despite measures by the Government to cool the sector, sparking concerns that another round of measures may be on the cards.

This time around, however, analysts say the Government may focus on curbing demand for industrial properties.

Prices of industrial property increased 7.2 per cent in the first quarter, according to the Urban Redevelopment Authority’s Property Price Index. Part of the reason for this is a shift in buying sentiment to industrial properties from residential units.

This has led to calls by property experts for more enforcement on real estate agents to accurately market and advertise industrial premises.

Challenges in regulating the industrial property sector are present though and some analysts observe that it will not be easy to differentiate genuine buyers from speculative investors.

Any government attempt to further detail what a particular industrial space can be used for would also stifle businesses which have to be flexible in a volatile global economy.

One of the methods the authorities are using to soften prices is to increase industrial land supply.

Some experts also expect demand to decline naturally amid the current gloomy economy and for industrial rents to stabilise in the current quarter and possibly even drop at the end of the year.

Source: Today – 22 May 2012

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