Govt to cool property market. Will it work?

[Ticklish8]

MND announces measures

 

THE Ministry of National Development (MND) announced on Monday several measures that would maintain a 'stable and sustainable' property market, that will take place with immediate effect.

 

In a statement issued on Monday morning, MND said it would increase the holding period for the imposition of Seller's Stamp Duty (SSD) on residential properties sold from one year to three years.

 

The SSD levied will vary according to the term of occupancy. If the property is sold in the first year of purchase, the full SSD will be levied - one per cent for the first $180,000 of the consideration, two per cent for the next $180,000, and three per cent for the balance. Two-thirds of the SSD will be levied for properties sold in the second year of occupancy and one-third for properties sold in the third year of occupancy.

 

The extended SSD will not affect HDB lessees as the required Minimum Occupation Period for HDB flats is at least 3 years.

 

For property buyers with outstanding housing loans, the Minimum Cash Payment has been increased from five per cent to ten per cent of the valuation limit. This measure is applied only to buyers of private residential properties, Executive Condominiums, HUDC flats and HDB flats (including those under the Design, Build and Sell Scheme) who are taking housing loans from MAS-regulated financial institutions who already have one or more outstanding housing loans.

 

For this group, the Loan-to-Value (LTV) limit has been lowered from 80 per cent to 70 per cent. Borrowers who do not have any outstanding housing loans will continue to have an LTV cap of 80 per cent. Loans granted by HDB for HDB flats (including DBSS flats) will still have an LTV cap of 90 per cent.

 

HDB loans are offered to eligible first-time flat buyers and second-timers who are right-sizing their flats to meet their housing needs. They are required to utilise all of their CPF Ordinary Account balance before HDB loans will be granted.

 

In their statement, the MND said lowering the LTV limit would 'send a clear signal' to financial institutions to maintain credit standards, and also encourage greater financial prudence.

[Joseph22]

MND announces measures

 

THE Ministry of National Development (MND) announced on Monday several measures that would maintain a 'stable and sustainable' property market, that will take place with immediate effect.

 

In a statement issued on Monday morning, MND said it would increase the holding period for the imposition of Seller's Stamp Duty (SSD) on residential properties sold from one year to three years.

 

The SSD levied will vary according to the term of occupancy. If the property is sold in the first year of purchase, the full SSD will be levied - one per cent for the first $180,000 of the consideration, two per cent for the next $180,000, and three per cent for the balance. Two-thirds of the SSD will be levied for properties sold in the second year of occupancy and one-third for properties sold in the third year of occupancy.

The extended SSD will not affect HDB lessees as the required Minimum Occupation Period for HDB flats is at least 3 years.

 

For property buyers with outstanding housing loans, the Minimum Cash Payment has been increased from five per cent to ten per cent of the valuation limit. This measure is applied only to buyers of private residential properties, Executive Condominiums, HUDC flats and HDB flats (including those under the Design, Build and Sell Scheme) who are taking housing loans from MAS-regulated financial institutions who already have one or more outstanding housing loans.

 

For this group, the Loan-to-Value (LTV) limit has been lowered from 80 per cent to 70 per cent. Borrowers who do not have any outstanding housing loans will continue to have an LTV cap of 80 per cent. Loans granted by HDB for HDB flats (including DBSS flats) will still have an LTV cap of 90 per cent.

 

HDB loans are offered to eligible first-time flat buyers and second-timers who are right-sizing their flats to meet their housing needs. They are required to utilise all of their CPF Ordinary Account balance before HDB loans will be granted.

 

In their statement, the MND said lowering the LTV limit would 'send a clear signal' to financial institutions to maintain credit standards, and also encourage greater financial prudence.

 

 

This is the Tie breaker. could potentially push up or push down the price.

[Lex250]

Yes, short term/knee jerk ..will cool it a bit

 

NO- after a while ...same thing will happen....they cannot buck the trend unless it is really drastic..

[Ticklish8]

I look at the property share prices. Muted leh... Not as draconian compare with the 1998 anti speculative measure.

 

My opinion: The last property bubble is fueled by cheap money (low interest rate) and hot money (from HK, China) almost similar to what we experiencing now. Since Helicopter Ben still maintaining low interest rate environment and fueling inflation everywhere from property, commodities (oil, wheat, whatever), the bubble will still persists.

 

The Chinese and HK govt have been trying very hard to suppress the bubble, but it is still there. My verdict sky high property market is here to stay.......

[Joseph22]

I look at the property share prices. Muted leh... Not as draconian compare with the 1998 anti speculative measure.

 

My opinion: The last property bubble is fueled by cheap money (low interest rate) and hot money (from HK, China) almost similar to what we experiencing now. Since Helicopter Ben still maintaining low interest rate environment and fueling inflation everywhere from property, commodities (oil, wheat, whatever), the bubble will still persists.

 

The Chinese and HK govt have been trying very hard to suppress the bubble, but it is still there. My verdict sky high property market is here to stay.......

 

one experience Property agent told me this.

 

in the history of property market price.

 

When the Gahmen try to bring down the price, it will just shoot up.

 

when the Gahmen try to bring up the price, it will just drop further.

 

Hence this trench will continue until the market crash. nothing gahmen do will help. what it did is just to let ppl have a sense that gahmen is doing something.

[Akula]

Think the new LTV will jus sieve out some of the marginal buyers.

 

Dun think its thier intention to depress property prices.

 

Jus not to let it be overly exuberance

[Ticklish8]

Hahahaha that a good one.

 

I see some of the government policy now very reactive.... overcrowding, built more MRT line, buy more buses, built more flat...... pity the younger generation who haven't start their career, families, properties etc. Tough luck for them.....

 

 

[Ticklish8]

There will never depress property market by using blunt instrument like they did previously, because falling property prices cause hardship.

 

But what is happening is a classic bubble, the party will continue for some time (nobody knows when it will end)....

 

 

 

Think the new LTV will jus sieve out some of the marginal buyers.

 

Dun think its thier intention to depress property prices.

 

Jus not to let it be overly exuberance

 

[Roh96]

In my view, this measure will only impact the middle income group who hold > 1 property and flush out some marginal speculators with low holding power. This measure is not enough to hurt the rich ones who are playing the market. I remember recently MM said spore propeties no bubble form, but looking at the measures the gov took recently to curb prices...i think they also see bubble now just they keep quiet and ride on the wave. Imagine the amount of $$ collected from stamp fee and land sale. At this stage, i believe supply already > demand. Ppl are snatching units on new launch projects like no tomorrow many of them buy > 1 unit at one go. Obviously they are buying on hope(flippers), not for staying purpose. Just look at the no. of units on sale on those newly TOP condos, >50% are on sales and unfurnished, >30% are advertising for rental, those really buy for staying are at most 30% or so. So tell me is our housing really over demand and under supply?

Edited August 30, 2010 by Roh96

[Joseph22]

Hahahaha that a good one.

 

I see some of the government policy now very reactive.... overcrowding, built more MRT line, buy more buses, built more flat...... pity the younger generation who haven't start their career, families, properties etc. Tough luck for them.....

 

these actually create jobs so i am fine.

[A_korusawa]

MND announces measures . . . .

 

In their statement, the MND said lowering the LTV limit would 'send a clear signal' to financial institutions to maintain credit standards, and also encourage greater financial prudence.

 

its oledi said, as above . . . so govt is NOT cooling the market - it just securing its monetary opportunity/minimise risk from the hot market.

dun be naive - govt has NEVER make attempts to 'cool' the market. just take advantage - in the expense fo marginal profits bet, developers & remisers - thus, buyers get the ultimate 'burnt'. that's all.

in fact, govt WANTS to inflate the market, but sustain it w/o bubble damages (that's why, we dun see huge price drops even when property slumps & in fact, its benchmarked by credible loans) - this is a lucrative prospect for our govt on the value of property they hold, as well as the CPF they bank-on, from ppl's investment gains to evaluating its value (comparing with medicshield etc.)!

 

shud the market be cooled - its NOT govt, but rather the economics exhautions and recoup for next opportunities

[Ticklish8]

Totally agree. Those who are rich in a different playing field..... Same like stocks....

 

 

In my view, this measure will only impact the middle income group who hold > 1 property and flush out some marginal speculators with low holding power. This measure is not enough to hurt the rich ones who are playing the market. I remember recently MM said spore propeties no bubble form, but looking at the measures the gov took recently to curb prices...i think they also see bubble now just they keep quiet and ride on the wave. Imagine the amount of $$ collected from stamp fee and land sale. At this stage, i believe supply already > demand. Ppl are snatching units on new launch projects like no tomorrow many of them buy > 1 unit at one go. Obviously they are buying on hope(flippers), not for staying purpose. Just look at the no. of units on sale on those newly TOP condos, >50% are on sales and unfurnished, >30% are advertising for rental, those really buy for staying are at most 30% or so. So tell me is our housing really over demand and under supply?

 

[Ticklish8]

Govt want to inflate market so Singaporean will be a slave to their property? [bigcry]

[Joseph22]

its oledi said, as above . . . so govt is NOT cooling the market - it just securing its monetary opportunity/minimise risk from the hot market.

dun be naive - govt has NEVER make attempts to 'cool' the market. just take advantage - in the expense fo marginal profits bet, developers & remisers - thus, buyers get the ultimate 'burnt'. that's all.

in fact, govt WANTS to inflate the market, but sustain it w/o bubble damages (that's why, we dun see huge price drops even when property slumps & in fact, its benchmarked by credible loans) - this is a lucrative prospect for our govt on the value of property they hold, as well as the CPF they bank-on, from ppl's investment gains to evaluating its value (comparing with medicshield etc.)!

 

shud the market be cooled - its NOT govt, but rather the economics exhautions and recoup for next opportunities

good post. agree fully. the only way they do things is by taxing.

 

Taxing do nuts.

[Pda_lover]

Did you guys see this?

 

 

 

During the National Day Rally on 29 Aug 2010, PM Lee Hsien Loong announced several measures to ensure that public housing will always remain within the reach of Singaporeans who are buying their first home. This will be achieved by increasing housing supply and dampening demand from those who are not in urgent need of housing.

 

2This press release provides details of the measures to:

 

(a) Allow households earning between $8,000 and $10,000, to buy new DBSS flats with a $30,000 CPF Housing Grant;

(b) Increase the supply of new flats, Design, Build and Sell Scheme (DBSS) flats, and Executive Condominiums (EC);

© Shorten the completion time of Build-To-Order (BTO) flats;

(d) Increase the Minimum Occupation Period (MOP) for non-subsidised flats to 5 years; and

(e) Disallow concurrent ownership of both HDB flats and private residential properties within the MOP.

More Housing Supply and Choices for First-Time Home Buyers

 

 

3HDB will ramp up the supply of new flats, DBSS flats and ECs substantially to meet the housing needs of first-time homebuyers.

 

 

4HDB will be offering more than 16,000 new flats in 2010. If demand remains strong, HDB is prepared to launch up to 22,000 new flats in 2011. These numbers are substantial. Over two years, HDB will offer more new flats than the total flats in Toa Payoh town today (35,400 flats).

 

 

5In addition, HDB will release more land for tender in 2010 to yield an estimated supply of 3,000 DBSS 1 flats and 4,000 ECs. In 2011, HDB will release land sites for another 4,000 DBSS flats and 4,000 ECs, if demand is sustained. This injection of 7,000 DBSS flats and 8,000 ECs over two years is also significant. In comparison, 4,000 DBSS flats and 10,000 ECs have been launched for public sale so far.

 

 

6Currently, first-timer households with monthly income of between $8,000 and $10,000 may buy an EC with a CPF Housing Grant of $30,000. To widen their housing options, HDB will allow these households to buy new DBSS flats with a CPF Housing Grant of $30,000 2 Similar to the purchase of ECs, the HDB concessionary loan will not be available for these buyers. This revision will be applicable to DBSS projects launched for public sale after 30 Aug 2010.

 

 

7To help households get their new flats faster, HDB has also streamlined the BTO processes to allow flat buyers collect keys to their new homes 6 months earlier. Buyers of projects launched in mid-2011 onwards will generally need to wait for 2.5 years 3 to collect the keys instead of the current 3 years.

 

 

HDB Flats for Owner-Occupation

 

 

8HDB flats are meant for long-term owner-occupation. HDB will increase the Minimum Occupation Period (MOP) to reinforce this and dampen demand from those who are not in urgent need of housing.

 

 

9First, the MOP of non-subsidised flats for resale and subletting of flat will be increased from three to five years. Second, buyers of non-subsidised flats will be disallowed from concurrently owning both an HDB flat and a private residential property within the MOP 4. Private property owners who buy a non-subsidised HDB flat must now dispose of their private residential property within six months from the date of flat purchase. This will help ensure that buyers purchase HDB flats only when they have the intent of staying in it for long term and ensure equitable treatment for all HDB flat lessees during their MOP. Ownership of private properties by HDB lessees will be allowed after the MOP.

 

 

 

10The revised changes are summarised in Table 1, and will apply to resale transactions where applications are received by HDB from 30 Aug 2010 onwards.

 

 

Table 1: Changes for Non-subsidised Flats*

 

Current

Revised

Resale

3 years

5 years

Subletting

3 years

5 years

Investment in Private Residential Property After Purchase of Non-Subsidised Flat

No Restriction

5 years

Disposal of Existing Private Residential Property After Purchase of Non-Subsidised Flat

Not Applicable

Within 6 months from

Date of Purchase

Note: * Resale flat bought without CPF housing grant. The MOP will be computed from the effective date of purchase of the non-subsidised flats.

 

[Wind30]

yup,

 

I think the other major measure is owners of private property CANNOT buy resale anymore. Which I think is a big thing as these are the RICH people who can afford 100k COV.... who just want to live in hdb, near markets, etc. the old generation who bought private cheap years ago

[A_korusawa]

Hahahaha that a good one.

 

I see some of the government policy now very reactive.... overcrowding, built more MRT line, buy more buses, built more flat...... pity the younger generation who haven't start their career, families, properties etc. Tough luck for them.....

 

if mrt is 'public' transport . . . then its the ONLY public transport that make huge profit in the world since its last economic depression in 2009

yes, its very very 'reactive' else we will have more casualties (not jumping into tracks but being pushed due to overcrowded)

yes, its very very 'reactive' else 1/2 of sillipore will be handicapped if we dun have any separate lines or backup lines to run the mrt

yes, its very very 'reactive' cos' soon all land transport (including buses) will be double the mrt fairs

yes, its very very 'reactive' cos' the mrt bosses had oledi made so much from us that soon enuff our mrt fairs will be priced like airplanes fairs if the same lines & population remains - if they continue their same bonuses' values.

 

reactive better than negative . . . . cheers!

 

 

 

[Joseph22]

saw it. but i was thinking, what if those rich ppl become bankrupt and need to buy a Re-sales before the can sell their house (who want to sell their house and have no roof over their head.)