View Full Version : Govt eases property cooling measures: sellers' stamp duty holding period now 3 years,
bargain hunter
10-03-17, 11:20
http://www.straitstimes.com/business/property/govt-eases-property-cooling-measures-sellers-stamp-duty-cut-tdsr-relaxed
Govt eases property cooling measures: sellers' stamp duty holding period now 3 years, rates cut; TDSR relaxed
PUBLISHED9 MIN AGOUPDATED5 MIN AGO
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SINGAPORE - The Government has relaxed some property cooling measures. The new rules take effect from March 11.
The sellers' stamp duty (SSD) is currently payable by those who sell a residential property within 4 years of purchase, at rates of between 4 per cent and 16 per cent of the property's value
The changes will see SSD holding period cut to three years, down from four.
The SSD rates will also be lowered by four percentage points for each tier.
The new SSD rates will range from 4 per cent (for properties sold in the third year) to 12 per cent (for those sold within the first year).
The TDSR framework will no longer apply to mortgage equity withdrawal loans with loan-to-value ratios of 50 per cent and below.
princess_morbucks
10-03-17, 12:28
http://www.businesstimes.com.sg/real-estate/singapore-introduces-new-stamp-duty-for-sellers-and-buyers-of-equity-interest-in
THERE will be a new stamp duty levied on the purchase and sale of residential property in property holding entities (PHE) with effect from March 11.
Termed the Additional Conveyance Duty (ACD), it is aimed at significant owners of equities interest in PHEs that can include partnerships, trusts and companies.
This means that those entities whose primary residential properties in Singapore form at least 50 per cent of its tangible assets will be captured in this new requirement..................
Hopefully, it will spite up some interest... Huat Ah.
What do u all think of this? How will it affect the price?
So more people will able to quit the market earlier, i see this more to impact supply increase, not demand.
Also now the loophole to move asset by company share has closed, developer may need different approach to sell its stock, likely end up to give more discount.
I believe both new rules above is to make price more affordable.
So the new SSD is only for those who bought their property after 11 Mar 2017 right? Those who are current owners still on the 4 years SSD?
bargain hunter
10-03-17, 13:34
So the new SSD is only for those who bought their property after 11 Mar 2017 right? Those who are current owners still on the 4 years SSD?
my agent said its for everyone who sells their property from 11 mar 2017. ie if bought on 10th mar 2014, can sell on 11 mar 2017 without having to pay any SSD. anyone wants to confirm with their agents?
my agent said its for everyone who sells their property from 11 mar 2017. ie if bought on 10th mar 2014, can sell on 11 mar 2017 without having to pay any SSD. anyone wants to confirm with their agents?
Wah this is nice if it is true.. but i thought i heard the other way and ie, it only apply to those who bought after 11 Mar
bargain hunter
10-03-17, 13:54
Wah this is nice if it is true.. but i thought i heard the other way and ie, it only apply to those who bought after 11 Mar
from mnd website, you are right!
http://app.mnd.gov.sg/Portals/0/JointPressReleaseAnnex.pdf
my agent said its for everyone who sells their property from 11 mar 2017. ie if bought on 10th mar 2014, can sell on 11 mar 2017 without having to pay any SSD. anyone wants to confirm with their agents?
the news released today...your agent so fast know already?
princess_morbucks
10-03-17, 13:59
my agent said its for everyone who sells their property from 11 mar 2017. ie if bought on 10th mar 2014, can sell on 11 mar 2017 without having to pay any SSD. anyone wants to confirm with their agents?
Your agent very blur lah.
I bought my unit last year...so if this unit I want to sell...is 12% right? But is wait 3 or 4 years?
bargain hunter
10-03-17, 14:14
the news released today...your agent so fast know already?
i update and ask her to find out lor. who knows end up come back is wrong info. lol.
bargain hunter
10-03-17, 14:16
I bought my unit last year...so if this unit I want to sell...is 12% right? But is wait 3 or 4 years?
http://app.mnd.gov.sg/Portals/0/JointPressReleaseAnnex.pdf
sorry to tell u that from the mnd link, its 16% if sell now or 4 year wait to don't pay any SSD.
princess_morbucks
10-03-17, 14:16
I bought my unit last year...so if this unit I want to sell...is 12% right? But is wait 3 or 4 years?
Those units bought before 11 March 2017, no change in the SSD.
So if you wanna sell it within 1 year, you still have to pay the 16% SSD.
bargain hunter
10-03-17, 14:17
Those units bought before 11 March 2017, no change in the SSD.
So if you wanna sell it within 1 year, you still have to pay the 12% SSD.
as corrected above, 16%! yikes!
the date of purchase refer to exercise option or collection of keys? Since in between got gap of about 2 months
Wow! Relaxing of SSD and TDSR property cooling measures!
Didn't they just said less than 1 MONTH ago that it is NOT TIME to relax property cooling measures???? <1 MONTH is long enough for them to change their mind??? :luke-and-darth: :smiley_simmons:
Tightening cycle has ended
Those units bought before 11 March 2017, no change in the SSD.
So if you wanna sell it within 1 year, you still have to pay the 16% SSD.
Where got people so boliao buy sell in 1 year in today's market? Still got about 3% BSD and lawyer fees etc.
Market sensitive info how can anyhow reveal to you?
Wow! Relaxing of SSD and TDSR property cooling measures!
Didn't they just said less than 1 MONTH ago that it is NOT TIME to relax property cooling measures???? <1 MONTH is long enough for them to change their mind??? :luke-and-darth: :smiley_simmons:
Buy before the removal of more cooling measures.
bargain hunter
10-03-17, 16:10
Wow! Relaxing of SSD and TDSR property cooling measures!
Didn't they just said less than 1 MONTH ago that it is NOT TIME to relax property cooling measures???? <1 MONTH is long enough for them to change their mind??? :luke-and-darth: :smiley_simmons:
also, why did they release the information at around 12pm (just before 12pm actually). normally they release on a friday evening after the stock market closes.
Amber Woods
10-03-17, 16:21
The change in SSD is to allow people who are still bullish and proceed to buy on 11 Mar 17 onward the opportunity to unload their units with less penalty due to the expected poor economy coming our way the next 10 years.
The removal of TDSR for equity-loan is to allow more people especially retirees with no income who want to downgrade the opportunity to take an equity loan without the burden of TDSR.
These two measures are necessary in view of the weaker economy going forward. More people will be out of job and more retirees need to downgrade hence these changes.
The change in SSD is to allow people who are still bullish and proceed to buy on 11 Mar 17 onward the opportunity to unload their units with less penalty due to the expected poor economy coming our way the next 10 years.
The removal of TDSR for equity-loan is to allow more people especially retirees with no income who want to downgrade the opportunity to take an equity loan without the burden of TDSR.
These two measures are necessary in view of the weaker economy going forward. More people will be out of job and more retirees need to downgrade hence these changes.
If economy so bad, no need to buy. Bull and bear can suddenly switch? Haven't we been bearish for 4 years already?
If let retirees downgrade no need to allow them leeway for TDSR... Equity loan means they continue to hold their private property.
The measures just make it easier to sell. Not buy. The absd is still a high wall to climb. I don't understand the market euphoria over this small relaxation.
I don't see more demand that will push prices up.
The measures just make it easier to sell. Not buy. The absd is still a high wall to climb. I don't understand the market euphoria over this small relaxation.
I don't see more demand that will push prices up.
But before sell, must buy to be eligible for new 3 year SSD.
bargain hunter
10-03-17, 20:58
If economy so bad, no need to buy. Bull and bear can suddenly switch? Haven't we been bearish for 4 years already?
If let retirees downgrade no need to allow them leeway for TDSR... Equity loan means they continue to hold their private property.
are these measures to suck up to lend lease ahead of their park place residences preview tomorrow? haha.
effectively, this now means they can buy and flip after 3 years? lol. and those who bought grandeur park and clement canopy in the last 2 weeks, can they ask developer to change the date of sale to tomorrow? :)
For most investor mentality who have bought GP and CC, 4 years is not an issue while they wait for TOP.
Now the short buyers and sellers are more welcome to come in. They are those that sell during sub-sales. Good price buy and good price sell type. They are usually the first to push the market up and the first to leave on any good gains.
But is reduction of SSD to 3 years sufficient to invite enough of them? We can only wait and see.
are these measures to suck up to lend lease ahead of their park place residences preview tomorrow? haha.
effectively, this now means they can buy and flip after 3 years? lol. and those who bought grandeur park and clement canopy in the last 2 weeks, can they ask developer to change the date of sale to tomorrow? :)
proud owner
11-03-17, 01:19
the date of purchase refer to exercise option or collection of keys? Since in between got gap of about 2 months
from the time you exercise option
proud owner
11-03-17, 01:22
Wow! Relaxing of SSD and TDSR property cooling measures!
Didn't they just said less than 1 MONTH ago that it is NOT TIME to relax property cooling measures???? <1 MONTH is long enough for them to change their mind??? :luke-and-darth: :smiley_simmons:
SSD is the least money making measure for govt ..
owners simply hold on for 4 yrs .. govt dont make money
prices generally lower .. who wants to sell ? unless desperate...so hold for 4 yrs ... no need to pay SSD ...govt dontmake money
so such stupid measure remove or not ... makes no difference to majority
Actually the main power measure that people don't seem to recognize is anything to do with TDSR changes, the actual camel that broke the back Iin 2013.
For the last two revisions, it has weighed heavily for the retirees, exempting them from TDSR and allowing equity loans. This supports the investor for long term sustainability to tide over cash crunch periods.
Exactly. The relaxation is only to help those whom need to sell. Nothing to encourage or making it easier to buy. And we need more demand to lift the current measures. The stock market and the property counters reaction surprised me. Maybe the rest can share if there are more relaxation coming our way?
The original TDSR had a dampening effect on confidence to sustain till after retirement. So I think the revisions may be an effect in restoring confidence irrespective of the take up rate of mortgage equity.
At the same time, we know how much the retirees love their few children so if they own a very valuable property, ... All these should translate to some numbers.
Actually the main power measure that people don't seem to recognize is anything to do with TDSR changes, the actual camel that broke the back Iin 2013.
For the last two revisions, it has weighed heavily for the retirees, exempting them from TDSR and allowing equity loans. This supports the investor for long term sustainability to tide over cash crunch periods.
For the retirees, it helps them to loan half and hold without TDSR.
It has no effect on other existing owners and is targeted to encourage borrowing by new buyers.
We are definitely staring at inflation in the eye for 2017 and 2018.
Exactly. The relaxation is only to help those whom need to sell. Nothing to encourage or making it easier to buy. And we need more demand to lift the current measures. The stock market and the property counters reaction surprised me. Maybe the rest can share if there are more relaxation coming our way?
Amber Woods
11-03-17, 08:55
Exactly. The relaxation is only to help those whom need to sell. Nothing to encourage or making it easier to buy. And we need more demand to lift the current measures. The stock market and the property counters reaction surprised me. Maybe the rest can share if there are more relaxation coming our way?
Traders react to the news and hope to take some profits. Traders are speculators and they trade base on market's reactions, rumors or news. They are the one who will get out of the market as soon as they get into.
The intents of the tweak in SSD and TDSR (for equity-loan) are clear and if we analysis objectively, they are meant to help the sellers and business persons and retirees to monetize their existing assets for some cash to tide over the expected slowing economy so that less people would be forced to sell their assets at depressed prices.
This government is responding to calls in view of the weakening economy in the years ahead.
also, why did they release the information at around 12pm (just before 12pm actually). normally they release on a friday evening after the stock market closes.
So that anyone who intends to buy on Fri can wait till Sat (Mar 11) to do so.
It only applies to new buyers that become potential sellers 3 years down the road.
A very small proportion of those retirees need the monetisation, agreed.
But a huge majority bought at last time prices, bought multiple and bought huge landed. Do you think most of them are so desolate???
Traders react to the news and hope to take some profits. Traders are speculators and they trade base on market's reactions, rumors or news. They are the one who will get out of the market as soon as they get into.
The intents of the tweak in SSD and TDSR (for equity-loan) are clear and if we analysis objectively, they are meant to help the sellers and business persons and retirees to monetize their existing assets for some cash to tide over the expected slowing economy so that less people would be forced to sell their assets at depressed prices.
This government is responding to calls in view of the weakening economy in the years ahead.
bargain hunter
11-03-17, 13:59
SSD is the least money making measure for govt ..
owners simply hold on for 4 yrs .. govt dont make money
prices generally lower .. who wants to sell ? unless desperate...so hold for 4 yrs ... no need to pay SSD ...govt dontmake money
so such stupid measure remove or not ... makes no difference to majority
they said since the 4 years was implemented, transactions plummeted. i didn't know its a hint that their profits are also falling. haha.
3 years will help improve the volume especially for new launches.
Perhaps to help some of those developers with remaining units and facing SSD to give them one final chance to clear their remaining units before the penalty kick in.
Amber Woods
11-03-17, 20:32
Perhaps to help some of those developers with remaining units and facing SSD to give them one final chance to clear their remaining units before the penalty kick in.
http://www.businesstimes.com.sg/real-estate/singapore-introduces-new-stamp-duty-for-sellers-and-buyers-of-equity-interest-in
THERE will be a new stamp duty levied on the purchase and sale of residential property in property holding entities (PHE) with effect from March 11.
Termed the Additional Conveyance Duty (ACD), it is aimed at significant owners of equities interest in PHEs that can include partnerships, trusts and companies.
This means that those entities whose primary residential properties in Singapore form at least 50 per cent of its tangible assets will be captured in this new requirement..................
The above ACD will ensure developers can no longer hold on to unsold units.
The above ACD will ensure developers can no longer hold on to unsold units.
Another possibility is developer actually will end up holding, paying extra charges, and including these in their costs at a later stage when market goes up again. Maybe sharing half with next time buyer, full transfer of costs to next time buyer, or at best sell at the same price while the lease starts to run and the interest rates go up.
bargain hunter
12-03-17, 11:13
ST headline:
Positive sentiment at show-flats after change in seller's stamp duty rules
Visitors to show-flats yesterday were upbeat after the change in seller's stamp duty (SSD) rules announced by the Government on Friday, saying that it gave them more of an incentive to invest.
Among the property measures announced was the change in the SSD rules. Buyers who buy a property from yesterday will not have to pay SSD if they sell it after three years. Previously, property investors could only avoid SSD if they sold their properties after four years. The SSD rates were also cut by four percentage points for each tier.
Consultant Debbie Lam, 31, said she has been looking over the past six months at investing in a property and said that the change in rules gives her more peace of mind. "I feel more assured now as I have more flexibility to sell earlier if I want to," she said.
She was at the show-flat of Australian developer LendLease's Park Place Residences at Paya Lebar Quarter, which opened for preview yesterday. The show-flat was crowded with property investors and first-time buyers, as Paya Lebar Quarter has been touted as an up-and-coming regional hub.
The 429-unit project is the third condominium project to hit the market this year, after UOL's The Clement Canopy in Clementi and CEL's Grandeur Park Residences in Tanah Merah. Even before the new property measures were announced, new launches over the past few months have seen a good response with strong sales.
Mr Mark Goh, 40, a manager in the construction industry who was also at the show-flat, said the changes had partly prompted him to turn up for the preview.
"The change in SSD is better for investors and will definitely motivate more people to buy, as there are fewer restrictions," he added.
Mr Goh, who has several investment properties, said earlier he would have preferred selling only after four years to avoid paying the SSD but was pleased that he has now the option to sell earlier.
Some seasoned investors, however, said that the change in duty has minimal impact on their investing decision. Mr Joshua Lai, 46, a chief financial officer, said that he saw the change as a sweetener for developers rather than buyers.
"It's good news, but being able to sell after three rather than four years is not a big difference for investors. It mainly helps developers, as they will be able to increase prices with better buyers' interest."
A prospective buyer interested in The Clement Canopy, who wanted to be known only as Miss Yip, reckons the change in SSD would mainly benefit young families who can upgrade from their HDB flats to a condo. "The change in SSD definitely helps buyers by providing more options in the future, but it mainly benefits upgraders," she said.
Mr Tay Kah Poh, executive director and head of residential services at Knight Frank Singapore, said that the changes sent a "helpful signal" to property buyers, giving them more flexibility in their options to sell. "The changes were a happy surprise, and will benefit the momentum of the recent new condominium launches," he added.
He thinks that transaction volumes will improve but does not expect immediate changes to prices.
"Developers are more concerned about improving volumes rather than raising prices. They are hoping for a return of optimism to buyers and the property market," he said.
The Government is relaxing loan limit rules for anyone wanting to borrow money using their residential property as collateral.
It is tweaking the total debt servicing ratio (TDSR) framework which stipulates that all of a borrower's debt repayments - including mortgage, credit cards and car loans - should not top 60 per cent of monthly income.
The move is set to help retirees, along with others wanting to cash out using the value of their home.
To date, the TDSR has applied to drawing down loans against the value of a home - known as mortgage equity withdrawal loans.
Under the change, the TDSR will no longer apply to such loans where the ratio of the loans, including any existing loans, to the property's value is 50 per cent or less. For example, a person with a $1 million home and a $100,000 outstanding housing loan can borrow up to $400,000 - that is, up to half the $1 million value of the property.
Under the old rules, he would also need to have ensured that his total debt servicing did not exceed 60 per cent of his monthly income, but this is no longer applicable. However, if the person in this example wants to borrow more than $400,000, he would not be exempt from TDSR.
The Government said in a press statement yesterday that "some borrowers have given feedback that the TDSR framework has limited their flexibility to monetise their properties in their retirement years".
"The Monetary Authority of Singapore will therefore relax the rules to meet such needs," it added.
Mr David Baey, head of mortgages at MoneySmart.sg, said that the number of such loans has been very small to date, at about one to two of every 100 loans he negotiates.
Such borrowers tend to use the loans to start businesses, send their children overseas for studies, or to make other investments such as stocks, he added.
Mr Desmond Sim, head of CBRE Research for Singapore and Southeast Asia, said the change would "likely promote property purchases only by asset-rich individuals", which are a small portion of property owners.
A DBS spokesman said the move gives home owners, especially the semi-retired or business owners, an added option to generate cash flow.
"A mortgage equity withdrawal loan is still a mid- to long-term financial commitment which requires monthly loan repayments. Home owners need to fully understand their needs and think how they will be using this increased cash flow," he added.
bargain hunter
12-03-17, 22:21
somebody has just bought what may have been the last stamp duty free bulk sale:
SALE OF 100% INTEREST IN SING HOLDINGS (ROBIN) PTE. LTD.
The Board of Directors of Sing Holdings Limited (the “Company” and together with its subsidiaries,
the “Group”) wishes to announce that the Company has entered into a sale and purchase
agreement on 10 March 2017 to dispose its entire 100% equity holding in Sing Holdings (Robin)
Pte. Ltd. (“SHR”) (the “SHR Disposal”) to a company incorporated in Singapore (the “Purchaser”)
which is not related to the Company, its Directors and controlling shareholders.
SHR is a property development company which developed the freehold condominium known as
Robin Residences located at Robin Drive, Singapore (the “Development”). The consideration for
the SHR Disposal (the “Consideration”) was arrived at on a “willing-buyer willing-seller” basis and
it takes into account the agreed property value at S$72,709,000 for 29 strata units in the
Development (the “Property Value”). The Consideration shall comprise the estimated net tangible
assets value as at completion date, adjusted for the Property Value and subject to post-completion
adjustments. It will be satisfied entirely in cash.
Completion of the SHR Disposal is conditional upon, inter alia, the following:
(a) written consent being given by the Controller of Residential Property (“CRP”) for the
Company to sell all the shares of SHR to the Purchaser (the “CRP Consent”) such that the
approval (qualifying certificate) issued by the CRP to SHR will be cancelled and a clearance
certificate pursuant to Section 10 of the Residential Property Act (Cap. 274) shall be issued
to SHR by the CRP after completion; and
(b) all conditions by the CRP in relation to the CRP Consent being satisfied.
Based on the unaudited consolidated financial statements of the Group for the year ended 31
December 2016:
(a) assuming that the SHR Disposal was effected on 1 January 2016, the Group’s earnings per
share would have decreased from 6.55 cents to about 5.59 cents; and
(b) assuming that the SHR Disposal was effected on 31 December 2016, the financial impact
on the Group’s net tangible asset per share would not be material.
Upon completion of the SHR Disposal, SHR will cease to be a subsidiary of the Company.
None of the Directors or controlling shareholders of the Company is deemed to have any interest,
direct or indirect, in the above transaction.
BY ORDER OF THE BOARD
SING HOLDINGS LIMITED
Lee Sze Hao
Chief Executive Officer
12 March 2017
Amber Woods
13-03-17, 10:51
Who are the biggest winners in the recent tweaks on property rules?
Check out what market players have to say about the move.
The recent easing of the rules in seller's stamp duties (SSD) and the total debt servicing ratio (TDSR) adjustments would benefit homeowners in their retirement years, according to market players.
In an unexpected move last week, the government decided to reduce the holding time of a property to three years to dodge paying for SSD. Currently, SSD is payable by those who sell a residential property within four years of purchase, at rates of between 4% and 16% of the property’s value. Meanwhile, the government said it will relax the rules and will no longer apply the TDSR framework to mortgage equity withdrawal loans with LTV ratios of 50% and below.
"We feel that changes to the TDSR framework will help homeowners to monetise their properties in their retirement years," PropNex CEO Ismail Gafoor said.
For Citi Research, the adjustments ease liquidity constraints for a minority, with other potential consequences.
“This gives an additional avenue for asset-rich but cash-poor retirees to monetise their properties, apart from selling existing larger properties to downgrade, and thus should be viewed in the context of similar moves (e.g. lease buyback schemes). But rather than a sustainable boost for consumption, which fell year-on-year in 4Q16 for the first time since the GFC, relaxing asset-based lending rules could unlock a low-cost source of financing for investments, or even SME owners who face tighter credit conditions,” Citi said.
Meanwhile, Krishna Guha of Jefferies said this will give flexibility to monetise properties in the retirement years for affected households, that is to borrow against the value of their properties to obtain additional cash. However, she noted that this is not expected to have much of an impact as such new loans will still be affected by TDSR.
"It is a small tweak and should not be viewed as any change to overall TDSR measures. In addition, ABSD rates and LTV limits are unchanged," she argued.
On the other hand, Alex Toh, a finance and property lawyer at Withers LLP said most of the mortgage equity loans that are taken up by homeowners are usually for those who use the loan proceeds for investments or if they are business owners, for the working capital for their businesses.
"Hence, the lifting of the total debt servicing ratio framework in relation to mortgage equity loans may help such business owners obtain more loans to support their businesses in this current uncertain economic climate. However, business owners may reconsider doing so in light of the possibility of interest rate hikes in the near future," Toh noted.
On the SSD adjustments, ERA key executive officer Eugene Lim said it brings relief and a way out for investors and property owners who may have to dispose of the property bought in the short term without the additional burden of SSD.
However, the tweak will only be applicable to residential properties bought after the implementation of the adjustment.
"So this measure is a forward-looking measure that allows prospective residential property purchasers to recalibrate their calculations, expectations, and holding period, going forward. Whilst it may change slightly how investors and homebuyers look at the timeline on holding the properties, we do not expect this tweak to have the effect of pushing up property prices in both the primary and secondary market. This is because there is still abundant supply in the residential property market and the demand-cooling ABSD rates and LTV limits remain unchanged," he said.
He furthered, "Developers and sellers are expected to remain realistic when pricing their units for sale. Market transaction data is likely to show that attractively or reasonably priced properties will find buyers much quicker; whilst overpriced ones are likely to remain on the shelf.”
Now is the phase of clearing stocks. Expect transactions to shoot up with marginal movements in the prices?
Amber Woods
13-03-17, 12:59
Industry players are quick to call the recent tweaks to the cooling measures as easing to give the market a "feel good" factor.
The SSD can be called an easing since the holding period is reduced from 4 to 3 years. Effectively, it does not encourage speculators nor any incentive for investors any real reason to enter the market.
As for the removal of TDSR for equity-loan, it is similar to the lease-buyback for HDB flat except that this is meant for private property owners needing the extra cash. TDSR still apply if the owner wants to increase the equity loan above 50%. Hence, this is in fact not an easing at all.
bargain hunter
13-03-17, 13:18
Now is the phase of clearing stocks. Expect transactions to shoot up with marginal movements in the prices?
we shall see when park place goes on sale on 25th march. :D
Also got effect on resale units. If u buy Now u only need to wait for 3yrs if u plan to sell off.
By Mr. Propwise
It’s finally happened – or so it seems. While steadfastly claiming that the property measures are here to stay, the government has finally eased the property cooling measures. These new measures took effect from March 11.
So does this mark the bottom of the property price decline? Read on to find out what I think.
Seller’s Stamp Duty holding period reduction – more than meets the eye
The Seller’s Stamp Duty (SSD) was payable if you sold a residential property within four years of purchase, at progressively lower rates of 16%/12%/8%/4% if you sold your property within 1/2/3/4 years of buying it.
The SSD has now been revised to be levied on holding periods of three years or less, with the amount to be paid lowered to 12%/8%/4% if you sell your property within 1/2/3 years of buying it.
Mr. Propwise’s thoughts: The 4-year SSD had led to a large fall in the number of property sales within a 4-year window of buying it. The government’s original motivation was to discourage speculators from “flipping” properties, but this also led to a significant reduction in supply in the resale market, and hence pushing demand to the new sale market. The 3-year SSD should lead to a gradual increase in supply in the resale market, which based on Economics 101 means that the downward pressure on prices in the medium term should be increased, i.e. This policy should be negative on prices. However, the impact will only be felt in the medium term as the reduction in the holding period is not retroactive but will only apply to purchases going forward. There could also be some uplift in demand as marginal buyers who were put off by an effective 4-year holding period could now be drawn back into the market given the reduction to a 3-year period.
Total Debt Servicing Ratio tweak
Previously, the across-the-board application of the Total Debt Servicing Ratio (TDSR) threshold of 60% meant that some borrowers (especially the older folk) found it difficult to refinance their properties and monetize them.
The new rules are now relaxed so that the TDSR framework no longer applies to mortgage equity withdrawal loans with LTV ratios of 50% and below.
Mr Propwise’s thoughts: This new rule gives an increased flexibility to people with fully or largely paid up properties (e.g. Retirees) to get cash out of them (i.e. Borrow against their equity) from banks. Previously, being unable to borrow against their properties, this group might have been forced to sell their properties to raise cash, thus increasing supply and pushing down prices. Overall, this policy should be marginally positive for the market, although the affected demographic is likely to be small.
Stamp duty on companies holding residential properties
There used to be a loophole on avoiding paying the property stamp duties including ABSD whereby residential properties could be sold by transferring interest in the company holding them instead of in the properties directly. This loophole is now being closed.
Going forward, residential property-holding entities (PHEs) will also be subject to the same stamp duties as direct property transactions when they transfer their equity interest.
Mr. Propwise’s thoughts: This measure does not really affect individual buyers and sellers of real estate, but is targeting developers who had previously tried to skirt around Qualifying Certificate penalties (i.e. Fines on them for not selling out their properties within a certain time period) by doing bulk transfers of their properties via a transfer of equity interest in the PHEs to related entities or other wealthy buyers. The net impact could be that developers will now be more incentivized to cut prices and sell affected properties to individual buyers instead of exploiting this previous loophole.
Overall impact – good for sentiment, but a marginal impact on supply and effective demand
I have to say it’s surprising that the government is now slightly relaxing the measures (although they call it “calibrated adjustments”) given that property prices have not come down significantly and demand for new sales is still strong.
This easing, even thought fairly insignificant, will fuel the hopes of buyers (and developers and agents) that a further relaxation of the measures is on the cards, especially of the “killer” ABSD and TDSR measures.
This improving sentiment should lead to better sales in both the new and resale markets as buyers who were previously sitting on the fence get encouraged that we’ve hit a bottom and come back into the market.
Is the property bull market back? The stocks of property developers have risen. Crowds were seen at the latest launch of Park Place Residences at Paya Lenard Quarters. But don’t forget we are also facing the prospect of multiple interest rate increases by the Fed this year and a weak economy. Let’s see how this plays out.https://www.propwise.sg/has-the-long-awaited-property-easing-measures-finally-come/
Crap. Property soul article again.
Crap. Property soul article again.
This article is by Propwise. Property Soul is another article with the same tone.
I hope people can see the situation for themselves and stop giving themselves false hopes listening to Analysts. I think I should write an official sounding analystic article too.
bargain hunter
17-03-17, 12:47
This article is by Propwise. Property Soul is another article with the same tone.
I hope people can see the situation for themselves and stop giving themselves false hopes listening to Analysts. I think I should write an official sounding analystic article too.
eagerly awaiting. :)
Amber Woods
17-03-17, 17:44
Fitch: Looser property curbs won't stop price falls
Housing prices in Singapore are likely to continue falling even as the government may gradually ease the property cooling measures, said Fitch Ratings on Wednesday (15 March).
The ratings agency noted that Singapore’s efforts to curb property speculation in an environment of low global interest rates were effective.
Speculative purchases fell from 2009 as the government introduced stricter restrictions on mortgage lending while increasing stamp duties.
With this, house prices have fallen over the last three years, while housing loan growth has slowed since 2011.
However, the government’s “first modest move” to “reversing macro-prudential tightening” – which was introduced on 10 March – is unlikely to have a significant impact on the housing market.
“Macro-prudential settings are still tight, while high vacancy ratios, a slower pace of immigration, subdued economic conditions and a weakening labour market are all likely to continue weighing on prices,” noted Fitch.
In addition, local interest rates are expected to increase from their current low levels, while house prices are still expected to fall by another two to five percent in the next two years.
Nonetheless, Fitch said banks are well-positioned to withstand a sharper drop in property prices, partly as a result of macro-prudential tightening.
This is because “average loan-to-value ratios are low, loan-loss coverage is adequate, and capital and liquidity buffers are strong”.
“Households also have healthy balance sheets and well-diversified assets,” it added.
I think shat Fitch said is obvious! Property price will not change direction, resulting in crash of more than -20% or even -35% by 2020... :panda:
Fitch: Looser property curbs won't stop price falls
Housing prices in Singapore are likely to continue falling even as the government may gradually ease the property cooling measures, said Fitch Ratings on Wednesday (15 March).
The ratings agency noted that Singapore’s efforts to curb property speculation in an environment of low global interest rates were effective.
Speculative purchases fell from 2009 as the government introduced stricter restrictions on mortgage lending while increasing stamp duties.
With this, house prices have fallen over the last three years, while housing loan growth has slowed since 2011.
However, the government’s “first modest move” to “reversing macro-prudential tightening” – which was introduced on 10 March – is unlikely to have a significant impact on the housing market.
“Macro-prudential settings are still tight, while high vacancy ratios, a slower pace of immigration, subdued economic conditions and a weakening labour market are all likely to continue weighing on prices,” noted Fitch.
In addition, local interest rates are expected to increase from their current low levels, while house prices are still expected to fall by another two to five percent in the next two years.
Nonetheless, Fitch said banks are well-positioned to withstand a sharper drop in property prices, partly as a result of macro-prudential tightening.
This is because “average loan-to-value ratios are low, loan-loss coverage is adequate, and capital and liquidity buffers are strong”.
“Households also have healthy balance sheets and well-diversified assets,” it added.
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