New Cooling measures - will it really cool the property market?

[yiantay]

Significant new property cooling measures have been announced. They include size restrictions on executive condominiums, tighter loan-to-valuations and higher buyer stamp duty.

The Government is also implementing a seller's stamp duty on industrial property for the first time to discourage speculative activity in the sector.

Key changes:
- Additional Buyer's Stamp Duty will be raised between five and seven percentage points across the board. To be imposed on PRs purchasing their first residential property and on Singaporeans purchasing their second property. The Government said the ABSD measures are significant but temporary and will be reviewed in future depending on market conditions.

- Individuals obtaining a second housing loan, the LTV limits will be lowered to 50 per cent, or 30 per cent if the loan tenure exceeds 30 years. For individuals obtaining third or subsequent housing loans, LTV will be 40 per cent or 20 per cent if tenure exceeds 30 years. For non-individual borrowers, LTV will be lowered to 20 per cent, from 40 per cent before.

Some news links
TODAYonline | Singapore | Govt announces new property cooling measures

Details of Round 7 Property Cooling Measures.. http://www.straitstimes.com/sites/straitstimes.com/files/additionalMeasures.pdf

 

[yiantay]

Many beat the clock by edging in their purchase at the 11th hour last night.
We had spent the night and wee hours of the morning to advise clients on their position vis-a-vis their purchase of property, both Singaporeans, PRs and Foreigners.

This round did turn away many foreigners from wishing to buy properties in Singapore. This is not necessarily a bad thing for us locals.

The worst hit are the newbie PR buyers, who are now facing an ABSD of 5%.
Many just managed to scrape together to afford a private property, and now having to scrape together another 5%, it may prove too much for some of them to bear.

What do you think? Is the latest cooling measure the harshest so far?

 

[alpc]

But ABSD is for all not just PR... So we do get hit as well. I think I damn suay lor... My current location bought at high pricing. Just after buying, gahmen introduce some measurements, property drop by more than 100K... Now, got BTO appt for mature estate which prices are high, they give this... If the surrounding prices drop, is hdb going to drop the BTO prices?!?!

 

[EEXOOO]

But ABSD is for all not just PR... So we do get hit as well. I think I damn suay lor... My current location bought at high pricing. Just after buying, gahmen introduce some measurements, property drop by more than 100K... Now, got BTO appt for mature estate which prices are high, they give this... If the surrounding prices drop, is hdb going to drop the BTO prices?!?!

I just paid the option fee. With this cooling measure, won't the resale prices drop and in turn prices for BTO (which are pegged to resale) drop too?

 

[bendwolf]

Hope hdb keep their words that bto are tied to resale, and not another electric pricing stupid reason.

 

[SKWSMC]

But ABSD is for all not just PR... So we do get hit as well. I think I damn suay lor... My current location bought at high pricing. Just after buying, gahmen introduce some measurements, property drop by more than 100K... Now, got BTO appt for mature estate which prices are high, they give this... If the surrounding prices drop, is hdb going to drop the BTO prices?!?!

Drop by 100k? Where you live? Pte ot HDB? It can not be drop by 100k if not there won't be so many people out there saying property price is high. Mind to share where you live?

 

[rerear]

does those PR who has private but has been subletting their HDB out, need to immediately stop their tenancy, or only applies for the next tenancy contract? i.e. are they still allowed to rent out, for now?

 

[yukita]

does those PR who has private but has been subletting their HDB out, need to immediately stop their tenancy, or only applies for the next tenancy contract? i.e. are they still allowed to rent out, for now?

still allowed to rent out up to limit ... if im not wrong.

 

[alpc]

Drop by 100k? Where you live? Pte ot HDB? It can not be drop by 100k if not there won't be so many people out there saying property price is high. Mind to share where you live?

Bought resale HDB in early 1997 (at the 1st bubble peak, I think the measurements was announced somewhere around April/June 1997), I got no $$$ to buy private. Yes, it drop that much because the prices here now just got a little higher than what I paid for the current location after so many years.

If I had sold it 5 years ago, I would still be in the "red" compare to most people. Heck, even if I sold now at the same price as I bought then, I still be in the "red" due to the amt of interest on the loan I paid for then (6.5%)...

 

[SKWSMC]

Bought resale HDB in early 1997 (at the 1st bubble peak, I think the measurements was announced somewhere around April/June 1997), I got no $$$ to buy private. Yes, it drop that much because the prices here now just got a little higher than what I paid for the current location after so many years.

If I had sold it 5 years ago, I would still be in the "red" compare to most people. Heck, even if I sold now at the same price as I bought then, I still be in the "red" due to the amt of interest on the loan I paid for then (6.5%)...

6.5% interest? What kind of loan you get? You can't get HDB loan? You high earner?
My friend also get an EA at that time. But now he make more than $100k without taking into consideration ofinterest.
I can say you have a bad buy. Well anyway you can just stay at your HDB and don't buy the BTO. What make you think this round of measure will affectvyour HDB price? The last 6 rounds did not make the martket come down. It just make the market climb slower which is good for everyone.

 

[lampano]

this by far the harshest, esp to the PRs.
Well i think this is only fair, having them to give up the hdb if they go for private. Subletting wise, it will definately be a case by case study if they have a good reason.

the ABSD is a tight slap across all....

 

[lampano]

does those PR who has private but has been subletting their HDB out, need to immediately stop their tenancy, or only applies for the next tenancy contract? i.e. are they still allowed to rent out, for now?

upon your current contract ends...

 

[j3ffr3y]

hello guys.. quick question.. does the new measures mean PR already holding 1 HDB and 1 private property must sell away either one? OR just referring that PR (currently holding only HDB) must sell his/her HDB before he/she can buy private property?

I am looking from the supply perspective if this measure will help boost the supply

 

[wahlin]

May I know SC who are now owned a HDB but decided to upgrade to a bigger HDB or EC need to pay ABSD. Will the new purchase be considered their second property since they have not sold their existing HDB.

 

[j3ffr3y]

Ooo I think the absd doesn't apply but the bank loan amount will ..

 

[yiantay]

still allowed to rent out up to limit ... if im not wrong.

With regards to PRs renting their HDB despite having private property this is what I have been advised from reliable source:

The new measures only affect those new purchase.
Those existing ones can only rent out up to a max of 3 yrs on a yearly basis.

 

[yiantay]

May I know SC who are now owned a HDB but decided to upgrade to a bigger HDB or EC need to pay ABSD. Will the new purchase be considered their second property since they have not sold their existing HDB.

You mean if you buy first then sell? You are given a time frame of 6 months to sell your existing Hdb flat if you buy HDB (you can only hold one HDB only)

As for buying EC also the same if you buy brand new. If you buy resale EC, its considered as Pte condo, so yes you kena ABSD and also the 50% LTV if you wish to hold on to your HDB (MOP completed)

 

[hwmook]

6.5% interest? What kind of loan you get? You can't get HDB loan? You high earner?
My friend also get an EA at that time. But now he make more than $100k without taking into consideration ofinterest.
I can say you have a bad buy. Well anyway you can just stay at your HDB and don't buy the BTO. What make you think this round of measure will affectvyour HDB price? The last 6 rounds did not make the martket come down. It just make the market climb slower which is good for everyone.

The previous rounds are like big waves hitting the shore, only make you wet wet. This one is like Tsunami, one shot give you gao gao. If you stand there maybe will drown leh, how to compare.

 

[killer]

number of transaction may take a hit, but until interest rate rises or mass retrenchment hits, i doubt prices will drop much, if it does at all. most people who already bought the properties to invest will have little problem holding unless something hits on their ability to pay loans

but if it does drop, it may be fast and furious. hope i do have money to catch if it does

 

[delphinium]

It's only fair that there is a differentiation between Singaporeans and Permanent Residents. Otherwise, Singaporeans might as well go convert themselves to PRs instead.

But really, more should be done to bring the housing prices down for the true blue Singaporeans trying to start a family!