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SINGAPORE, Jan 14 (Reuters) - Shares of Singapore property developers dropped on Monday after the city-state's government introduced sweeping measures to cool the housing market, which has seen strong demand despite a weak economy and previous efforts to curb prices. Shares of CapitaLand Ltd fell 5.9 percent, City Developments Ltd sank 7.3 percent and Keppel Land Ltd dropped 7.5 percent. The Straits Times Index was 0.8 percent lower. Foreigners and companies buying residential property will now be subject to a stamp duty of 15 percent of the purchase price, up from the previous 10 percent. Singapore also introduced, for the first time, a seller's stamp duty of 5 to 15 percent on those who buy and then sell industrial properties such as warehouses and factories within three years. "We think the reaction to this set of comprehensive measures will be the most significant thus far, relative to the earlier six rounds," Barclays said in a report. "Coupled with the large supply pipeline of public and private housing over the next few years, we think property prices will very likely stabilise, if not fall, this year." OCBC Investment Research cautioned against buying property stocks on weakness as the latest set of cooling measures would likely have a deep and sustained impact on demand fundamentals. "These curbs point to a strong political will to soften property prices and possibly more aggressive measures ahead," it added.
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