What's the purpose of the extra ABSD?

[newbie11]

I can only think of it as extra revenue to govt. the only party that benefits. Why not lower max LTV by 7% to encourage greater prudence? Or is this a stealth tax to fund govt spending?

[teddybear]

It is as obvious as bright daylight. The ABSD ultimately have to come from buyer or seller's pocket (as they will have to take this into account)...

People say banks are legalized "loan sharks" (e.g. charge 24% for credit card debts).... What would people say about ABSD???

I can only think of it as extra revenue to govt. the only party that benefits. Why not lower max LTV by 7% to encourage greater prudence? Or is this a stealth tax to fund govt spending?

[bargain hunter]

i support lower max LTV by 10% (since need to "penalise" more if its own pocket) vs 7% stamp duty. at the least, 10% is to reduce loan, as what u said, prudence. 7% gone just like that is.

I can only think of it as extra revenue to govt. the only party that benefits. Why not lower max LTV by 7% to encourage greater prudence? Or is this a stealth tax to fund govt spending?

[minority]

I can only think of it as extra revenue to govt. the only party that benefits. Why not lower max LTV by 7% to encourage greater prudence? Or is this a stealth tax to fund govt spending?

Well then the quantum of the property stays the same for all class of buyers. the richer ones dont need high LTV anyway. it will still crowd out the weaker buyers.

The whole idea is to benefit a group of buyers. the 1st timers. And also make it a extra pain for 2nd or 3rd unit buyer making them pay higher than the 1st timmer. Thus deterring them coz the deal is not so sweet.

[minority]

i support lower max LTV by 10% (since need to "penalise" more if its own pocket) vs 7% stamp duty. at the least, 10% is to reduce loan, as what u said, prudence. 7% gone just like that is.

lower LTV only reduce the loan amount. encourage prudence. But cash rich folks dont need the standard LTV amyway.. they will still crowd out the normal 1st timmers.

[timmy]

lower LTV only reduce the loan amount. encourage prudence. But cash rich folks dont need the standard LTV amyway.. they will still crowd out the normal 1st timmers.

How about lower LTV and impose a debt-to-income ratio, like what Hong Kong and South Korea does? The latter weeds out those who may have no prob with hefty cash down payment but have limited recurring income to sustain monthly mortgage repayment. there must be some way to cool market effectively without sucking the people dry.

[mianbao]

I can only think of it as extra revenue to govt. the only party that benefits. Why not lower max LTV by 7% to encourage greater prudence? Or is this a stealth tax to fund govt spending?

1. First time buyers don't get to pay ABSD.
2. Folks who intend to sell their first property will get the 7% refunded.

So this is likely to help people with the intent of having only 1 property.

[bsslang]

1. First time buyers don't get to pay ABSD.
2. Folks who intend to sell their first property will get the 7% refunded.

So this is likely to help people with the intent of having only 1 property.

Or rather to reduce the demand from people who are looking beyond their first property. Demand from this group seems too bullish for the market.

[minority]

How about lower LTV and impose a debt-to-income ratio, like what Hong Kong and South Korea does? The latter weeds out those who may have no prob with hefty cash down payment but have limited recurring income to sustain monthly mortgage repayment. there must be some way to cool market effectively without sucking the people dry.

sure.. u can lower the LTV to a so painful amount. so then this means a policy to favour the very rich? coz from a quantum per say no impact to them. They are paying fair market value. Its only when u make it unfair to a group with $$$ advantage then u can give another group with less $$$ advantage.

I guess u are rich so u dont like to pay over the common people. that is not right.

[eng81157]

sure.. u can lower the LTV to a so painful amount. so then this means a policy to favour the very rich? coz from a quantum per say no impact to them. They are paying fair market value. Its only when u make it unfair to a group with $$$ advantage then u can give another group with less $$$ advantage.

I guess u are rich so u dont like to pay over the common people. that is not right.

this is a socialist concept, which i thought you were against vehemently?!

[indomie]

Or rather to reduce the demand from people who are looking beyond their first property. Demand from this group seems too bullish for the market.

The demand will remain high, because the gov is projecting low interest rate to remain low for quite sometimes. If there is a believe that interest rate will pick up, then there is no need for absd.

[Shanhz]

The demand will remain high, because the gov is projecting low interest rate to remain low for quite sometimes. If there is a believe that interest rate will pick up, then there is no need for absd.

the other way to look at it, is to say interest rate expected to pick up. so to prevent more SC from burning their fingers, come out with ABSD

[indomie]

the other way to look at it, is to say interest rate expected to pick up. so to prevent more SC from burning their fingers, come out with ABSD

The global economy can't afford high interest rate maybe for the next 10 years. There must be a boom in population and productivity for interest rate to hike. Another factor is the slow deleveraging process. Western countries refusal to take a biter medicine resulting in slow process in winding down inefficiency. Therefore it will slow the process of economic growth.

[eng81157]

The demand will remain high, because the gov is projecting low interest rate to remain low for quite sometimes. If there is a believe that interest rate will pick up, then there is no need for absd.

threats of currency wars are looming. if all hell breaks loose, then interest rates will be subdued for a long, long time

[Vincegoh]

threats of currency wars are looming. if all hell breaks loose, then interest rates will be subdued for a long, long time

old granny's tale of currency wars has been in circulation for past 3 years and is getting stale. fed is expected to start tightening liquidity with the hawkish risk priced in t bills and cash bonds.

[indomie]

old granny's tale of currency wars has been in circulation for past 3 years and is getting stale. fed is expected to start tightening liquidity with the hawkish risk priced in t bills and cash bonds.

China as the bond holder will be happy to see that. If your hawkish scenario came through, then the chinese will continue bombardment of their cheap products due to significant increase of USD. And the whole western world ruination will continue. Not that fast buddy. We are in uncharted territories now. There is never a country like China to rise up, and challenging the world no 1 dominant of USA. Sg interest rate will probably rise up when reminbi already become the world defacto currency. Until then we are on board of uncle sam near zero ride.

[Vincegoh]

China as the bond holder will be happy to see that. If your hawkish scenario came through, then the chinese will continue bombardment of their cheap products due to significant increase of USD. And the whole western world ruination will continue. Not that fast buddy. We are in uncharted territories now. There is never a country like China to rise up, and challenging the world no 1 dominant of USA. Sg interest rate will probably rise up when reminbi already become the world defacto currency. Until then we are on board of uncle sam near zero ride.

bro, my belief is that we will not be revisiting the i/r environment in 2007 but we will most likely be seeing a gradual rise in i/r and expectations in the coming quarters. alot of factors still to be weighed but overall inclination is that we will be seeing the trough soon.

SGD NEER's band may start tightening in tandem (i/r is not a very useful tool in our context) and will be wise for us to keep some buffer to cushion any liquidity tightening beginning this year. juz my thoughts so may not echo what most of us believe in.

either way, i'm still a bull on the sg ppty in the long run so dun flame me!

[Vincegoh]

China as the bond holder will be happy to see that. If your hawkish scenario came through, then the chinese will continue bombardment of their cheap products due to significant increase of USD. And the whole western world ruination will continue. Not that fast buddy. We are in uncharted territories now. There is never a country like China to rise up, and challenging the world no 1 dominant of USA. Sg interest rate will probably rise up when reminbi already become the world defacto currency. Until then we are on board of uncle sam near zero ride.

china is at the early stages of financial openness, a period of teasing and shyness much like a young virgin when it comes to her first night... on one hand they are testing new mechanisms in their frontier cities like wenzhou and qianhai, but on the other hand they are still worried about liquidity outflows. recently, there's been some echos of tightening of measures to ensure liquidity containment (normal chinese citizens are not supposed to move funds beyond usd50k pa)... juz last week, a 22yr old chinese boy is hung up to dry for trying to launder hkd13bn of cross border monies in hk. juz one example that they wanna flag out to sha yi jin bai..

truth is, this is juz a statement of intent but the rmb is still a relatively long way to becoming the reserve currency. i do not foresee it taking the helm for at least another couple decades. the plan to fully liberalise their currency trading will certainly be beyond the reign of xi jinping and the current crop of liberalists. too much social considerations at stake to push it through in too short a time..

[indomie]

bro, my belief is that we will not be revisiting the i/r environment in 2007 but we will most likely be seeing a gradual rise in i/r and expectations in the coming quarters. alot of factors still to be weighed but overall inclination is that we will be seeing the trough soon.

SGD NEER's band may start tightening in tandem (i/r is not a very useful tool in our context) and will be wise for us to keep some buffer to cushion any liquidity tightening beginning this year. juz my thoughts so may not echo what most of us believe in.

either way, i'm still a bull on the sg ppty in the long run so dun flame me!

U are right. Learning from the bond shock of 2007, US is unlikely to shoot itself in the foot again. But US is facing a different opponent now, unlike the cold war uni soviet. So I am betting the recovery is not going to be that fast. Not this year, not next year.

[Vincegoh]

U are right. Learning from the bond shock of 2007, US is unlikely to shoot itself in the foot again. But US is facing a different opponent now, unlike the cold war uni soviet. So I am betting the recovery is not going to be that fast. Not this year, not next year.

yup on this front i agree. but they will start limiting n pulling back excess liquidity (and probably reduce the bloated fed balance sheet) in the next 2 years... i/r will stay at nominal 0-0.25% band for this period but yet we will see withdrawal symptoms still... so best to err on the side of caution and keep some buffer in place..

anyway, sg ppty huat arhh!!

[indomie]

yup on this front i agree. but they will start limiting n pulling back excess liquidity (and probably reduce the bloated fed balance sheet) in the next 2 years... i/r will stay at nominal 0-0.25% band for this period but yet we will see withdrawal symptoms still... so best to err on the side of caution and keep some buffer in place..

anyway, sg ppty huat arhh!!

If u see what I see... U will agree that almost every countries on earth now is relying more and more on domestic demand for their economic growth. That's include sg too with the 6.9 million population. Thus, less incentive for the gov to ruin their own domestic demand by increasing the interest rate. Unless of course if we suddenly fund an oil well reserve under the ground somewhere in geylang.

[minority]

this is a socialist concept, which i thought you were against vehemently?!

since when this is socialist concept? anyway u dont collect $$ how u find a socialist needs? need to be capitalist 1st.

[eng81157]

old granny's tale of currency wars has been in circulation for past 3 years and is getting stale. fed is expected to start tightening liquidity with the hawkish risk priced in t bills and cash bonds.

all of us know it's stale but look at what BoJ did......another hare-brained

[minority]

If u see what I see... U will agree that almost every countries on earth now is relying more and more on domestic demand for their economic growth. That's include sg too with the 6.9 million population. Thus, less incentive for the gov to ruin their own domestic demand by increasing the interest rate. Unless of course if we suddenly fund an oil well reserve under the ground somewhere in geylang.

Well there is a large part of the population that fear growth. rather F it. they say. stay stagnant and let faith consume us.

For 1 I think tats stupid its like a kangaroo staring frozen at a on coming truck with head lights in its eyes. leaving it all to faith.

[eng81157]

since when this is socialist concept? anyway u dont collect $$ how u find a socialist needs? need to be capitalist 1st.

please study more

"Socialists generally argue that capitalism concentrates power and wealth within a small segment of society that controls the means of production and derives its wealth through a system of exploitation. This creates a stratified society based on unequal social relations that fails to provide equal opportunities for every individual to maximise their potential,and does not utilise available technology and resources to their maximum potential in the interests of the public."

[minority]

please study more

"Socialists generally argue that capitalism concentrates power and wealth within a small segment of society that controls the means of production and derives its wealth through a system of exploitation. This creates a stratified society based on unequal social relations that fails to provide equal opportunities for every individual to maximise their potential,and does not utilise available technology and resources to their maximum potential in the interests of the public."

CLAP CLAP u can use wikipedia.. so ???

[eng81157]

CLAP CLAP u can use wikipedia.. so ???

paiseh, forgot singular-celled organism that do not have higher neural functions can't possible differentiate between concepts of capitalism and socialism

[Regulators]

you really make me laugh till my sides split. Capitalism leading to socialism?....LOL...do you even know what you are talking about??? social needs and socialist needs are two different things

since when this is socialist concept? anyway u dont collect $$ how u find a socialist needs? need to be capitalist 1st.

[indomie]

[Vincegoh]

If u see what I see... U will agree that almost every countries on earth now is relying more and more on domestic demand for their economic growth. That's include sg too with the 6.9 million population. Thus, less incentive for the gov to ruin their own domestic demand by increasing the interest rate. Unless of course if we suddenly fund an oil well reserve under the ground somewhere in geylang.

okay lah.. next yr same time we see how the mortgage rates have changed loh..