View Full Version : Curbing price hikes
http://www.straitstimes.com/ST%2BForum/Story/STIStory_446887.html
Oct 27, 2009
PROPERTY MARKET
Curbing price hikes
Increase down payment ratio
IN ITS bid to cool the rapid rise in property prices, Hong Kong increased the down payment ratio to 40 per cent for properties above HK$20 million (S$3.6 million). For those priced below HK$20 million, the maximum loan of HK$12 million applies.
Although the increase in down payment affects mainly the high-end segment of Hong Kong's property market, it illustrates two points. One, the down payment ratio of property purchases in Hong Kong seems to be at least 10 percentage points higher than Singapore's. Two, an increase in down payment ratio is the most effective measure to curb property price increases in Singapore as a direct demand-side measure.
After all, an increase in down payment ratio was adopted in the late 1990s in Singapore, which led to a relatively steep decline in property prices. However, currently, assuming a loan-to-value ratio of 80 per cent requirement typical of most banks, only 5 per cent cash is necessary. The remaining 15 per cent is settled by the buyer's CPF.
In today's global village, policy measures must not be evaluated in isolation. In addition, 'hot money' may soon flow into Singapore via investments in the property sector, due to the relatively low barriers of entry here and a mere 20 per cent cash down payment, hence pushing property prices in the Republic even higher.
What will the Government do to cool the property sector, in view of the similarly strong increase in property prices in the third quarter? Will there be an increase in the down payment ratio and if not, why?
Hsu Chong Pin
http://www.straitstimes.com/ST%2BForum/Story/STIStory_446887.html
Oct 27, 2009
PROPERTY MARKET
Curbing price hikes
Increase down payment ratio
IN ITS bid to cool the rapid rise in property prices, Hong Kong increased the down payment ratio to 40 per cent for properties above HK$20 million (S$3.6 million). For those priced below HK$20 million, the maximum loan of HK$12 million applies.
Although the increase in down payment affects mainly the high-end segment of Hong Kong's property market, it illustrates two points. One, the down payment ratio of property purchases in Hong Kong seems to be at least 10 percentage points higher than Singapore's. Two, an increase in down payment ratio is the most effective measure to curb property price increases in Singapore as a direct demand-side measure.
After all, an increase in down payment ratio was adopted in the late 1990s in Singapore, which led to a relatively steep decline in property prices. However, currently, assuming a loan-to-value ratio of 80 per cent requirement typical of most banks, only 5 per cent cash is necessary. The remaining 15 per cent is settled by the buyer's CPF.
In today's global village, policy measures must not be evaluated in isolation. In addition, 'hot money' may soon flow into Singapore via investments in the property sector, due to the relatively low barriers of entry here and a mere 20 per cent cash down payment, hence pushing property prices in the Republic even higher.
What will the Government do to cool the property sector, in view of the similarly strong increase in property prices in the third quarter? Will there be an increase in the down payment ratio and if not, why?
Hsu Chong Pin
Now the price of all land sales so high. Newspaper articles always say developer need to sell at least $700++psf to break even, most likely developer would sell at 900++psf.
50% downpayment also cannot bring down the price ma. Only can prevent prices going further up. Haizzzz. The best is to live in HDB la.
If the government acts to cool property prices, especially private properties, then should it also not act to push up property prices when the market are very bad (e.g. during 2008-early 2009)? If it didn't, why should it cool property prices now? If they do anything as drastic or as radiculous as what this writer advocates, then it should also explain why it didn't do anything when property market so bad in 2008-early 2009? Strange. The writer sounds like some lousy losers who missed the boat and then now crying for help for them to buy cheap cheap is it? (May be he has a lot cash but not willing to buy at current price?).:hell-hath-no-fury:
http://www.straitstimes.com/ST%2BForum/Story/STIStory_446887.html
Oct 27, 2009
PROPERTY MARKET
Curbing price hikes
Increase down payment ratio
IN ITS bid to cool the rapid rise in property prices, Hong Kong increased the down payment ratio to 40 per cent for properties above HK$20 million (S$3.6 million). For those priced below HK$20 million, the maximum loan of HK$12 million applies.
Although the increase in down payment affects mainly the high-end segment of Hong Kong's property market, it illustrates two points. One, the down payment ratio of property purchases in Hong Kong seems to be at least 10 percentage points higher than Singapore's. Two, an increase in down payment ratio is the most effective measure to curb property price increases in Singapore as a direct demand-side measure.
After all, an increase in down payment ratio was adopted in the late 1990s in Singapore, which led to a relatively steep decline in property prices. However, currently, assuming a loan-to-value ratio of 80 per cent requirement typical of most banks, only 5 per cent cash is necessary. The remaining 15 per cent is settled by the buyer's CPF.
In today's global village, policy measures must not be evaluated in isolation. In addition, 'hot money' may soon flow into Singapore via investments in the property sector, due to the relatively low barriers of entry here and a mere 20 per cent cash down payment, hence pushing property prices in the Republic even higher.
What will the Government do to cool the property sector, in view of the similarly strong increase in property prices in the third quarter? Will there be an increase in the down payment ratio and if not, why?
Hsu Chong Pin
proud owner
27-10-09, 21:28
Now the price of all land sales so high. Newspaper articles always say developer need to sell at least $700++psf to break even, most likely developer would sell at 900++psf.
50% downpayment also cannot bring down the price ma. Only can prevent prices going further up. Haizzzz. The best is to live in HDB la.
the best is to buy landed ..
pay 2 mio for a piece of land .. its future value is huge ..
imagine 2 rows of terraces .. each costing 2 mio ..
But potentially , the 2 rows can be enbloced and built into condos...
the best is to buy landed ..
pay 2 mio for a piece of land .. its future value is huge ..
imagine 2 rows of terraces .. each costing 2 mio ..
But potentially , the 2 rows can be enbloced and built into condos...
true but not every landed property can be built into condo. depends on location.
proud owner
28-10-09, 10:44
true but not every landed property can be built into condo. depends on location.
can build cluster house ... look at the clusters now ... land only 1600 sqft .. build 4 storey plus basement ..
a semi D 3200 sqft can build 2 cluster units already
Property_Owner
28-10-09, 10:49
the best is to buy landed ..
pay 2 mio for a piece of land .. its future value is huge ..
imagine 2 rows of terraces .. each costing 2 mio ..
But potentially , the 2 rows can be enbloced and built into condos...
There is another old man that I know owns 2 rows or landed in Joo Chiat. :)
http://www.straitstimes.com/ST%2BForum/Story/STIStory_448128.html
October 30, 2009 Friday
Flat valuation reflects state of property market
I REFER to Mr Daniel Choy's letter on Tuesday, 'Curbing price hikes'.
His assertion that valuation chases after cash over valuation (COV) is incorrect. Rather the valuation process reflects the state of the property market. If there are sufficient buyers who are prepared to pay a higher price than valuation, this should result in a higher valuation.
As Mr Choy rightly pointed out, 'buyers are generally prepared to fork out between $50,000 and $100,000 for a good location'. This would be an indication of the market demand for properties in good locations, which will result in a higher valuation of such properties.
His suggestion to base 'a typical flat's valuation on the average price for the whole of Singapore' is not valuation, but rather an administrative decision or policy which will be difficult to implement as it would mean that 'better properties' would be sold at a lower price and 'poorer properties' at a higher one.
In valuation, we need to consider unique characteristics such as location, size, age and condition of the property concerned, and not based on the average prices of all properties.
Janet Han (Ms)
Secretariat
Singapore Institute of Surveyors and Valuers
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