New Cooling Measures

[economist]

I have to say u r a very good thinker. It is very logical to think of it like you do

thank you, but everyone is thinking here, thinking especially hard after every CM to guage its impact, aren't we?

[ecimbew]

Shall not say much but you are pretty good

This CM will cool the market a bit but the real demand will still be there.

Hmmm ... Not sure if policy makers did see our posts here? Remember some weeks back we were talking abt what is happening the showflats with youngsters buying condos like a Prada bag (parents pay)?

Think maybe policy makers saw such posts??!!

Maybe from now on should refrain from posting real time happenings in the showflats!!

Anyway... 60% is a joke la ... I can't reveal what is the joke ... U all have to figure it out here...

No wonder my Mentor writes in codes... Now I understand ... To avoid detection by some policy makers...

DKSG

[Ringo33]

This new ruling will have impact on

1) People who wishes to buy property via wife children siblings, parents
2) People who wishes to buy property via asset based lending
3) People who wishes to max out loan to buy large quantum properties, such as landed.

[proud owner]

It is targeted at specific income brackets if u read wiki carefully. Very scary hor!

so I was partially correct lah ...


cos housing is a necessity .. and gain ... is less than profit/gain in stocks..

so they tax more on people making money from equities ...and less on real property

[狮子王]

This new ruling will have impact on

1) People who wishes to buy property via wife children siblings, parents
2) People who wishes to buy property via asset based lending
3) People who wishes to max out loan to buy large quantum properties, such as landed.

Woahahaahhahahahhahahahha..... Do u have to be so clear?

[ecimbew]

Yes the standardisation is finally here. At least MAS is doing their job.

My personal feel is that it doesn't differ much from the current practice. Why? this is because MAS has been talking with banks since a few months ago, and MAS, as a regulator, wouldn't want to kill banks' business, MAS couldn't even afford the new loans to show year-on-year declines.

I'm not sure about the current practice as banks never question me when I took loans, however, my guess is that they didn't have a standardized framework to assess TDSR for all loans using 3.5%, what banks did were perhaps only looking at individual mortgage loans, applying a rate like 2.5% or 3%, they probably applied some haircuts to rental too, and banks are no-idiot, while they have been loose in the above, they probably applied a stricter and lower ratio for this individual mortgage service ratio, probably in the region of 40% to 50%. What MAS did was really to standardize it, and probably when MAS helped setup this new TDSR framework, they already took a survey of existing loan applicants, and found that some 95% of applicants satisfy the new TDSR framework, and only then they can launch the new framework.



Quote:
Originally Posted by economist
To know the real impact of this measure, one must know the existing bank policies and usual practices when they give out housing loans.
If banks have already been adhering to similarly strict policies or practices, say they use medium rate of 3% (slightly less than this time round's 3.5%) to calculate TDSR, then the impact would be minimal.
If banks have been too lax before, then there will be some impact.

We need forumers who just took loans in recent years and who have been able to understand how banks assess his TDSR and his eligibility, to contribute here, in order to gauge the impact. This is how a forum can really help.

[狮子王]

so I was partially correct lah ...


cos housing is a necessity .. and gain ... is less than profit/gain in stocks..

so they tax more on people making money from equities ...and less on real property

No, u are fully correct to say that.

The capital gains in us was applied to income brackets of more than $40,000.

the subprime resulted from the lower brackets or households with lower income like $8000 which are not taxed on capital gains.

[ecimbew]

Woahahaahhahahahhahahahha..... Do u have to be so clear?

R is always very direct. I'm scared of him.

[狮子王]

R is always very direct. I'm scared of him.

Me too lol

[economist]

This new ruling will have impact on

1) People who wishes to buy property via wife children siblings, parents
2) People who wishes to buy property via asset based lending
3) People who wishes to max out loan to buy large quantum properties, such as landed.

And the question is, how many percentage of potential buyers belong to these three categories? If it is just 5%, the impact would be limited, if it is 20%, the impact would be felt.

[DKSG]

Yes the standardisation is finally here. At least MAS is doing their job.

Even credit risk management now also Kenna standardized by MAS!

Banks can now reduce the number of head counts in credit risk dept, hmmm ... Is that the dept yowetan is working in ??!!

DKSG

[ecimbew]

And the question is, how many percentage of potential buyers belong to these three categories? If it is just 5%, the impact would be limited, if it is 20%, the impact would be felt.

Gut feel is below 20 but close. Impact will be felt. K n S can sleep soundly.

[DKSG]

And the question is, how many percentage of potential buyers belong to these three categories? If it is just 5%, the impact would be limited, if it is 20%, the impact would be felt.

In the past few months, if you have spoken to Barbarella, Leticia or Lulu, you will know this percentage is confirm more than 5%...

The rest cannot say more lo!

DKSG

[ecimbew]

Even credit risk management now also Kenna standardized by MAS!

Banks can now reduce the number of head counts in credit risk dept, hmmm ... Is that the dept yowetan is working in ??!!

DKSG

He ah. I have a feeling that T created this framework for him (his character at least).



Anyone knows how to read palm fortune?

[Ringo33]

And the question is, how many percentage of potential buyers belong to these three categories? If it is just 5%, the impact would be limited, if it is 20%, the impact would be felt.

depend which segment of the market. For mass market, I think the impact will be negligible because quantum is small and buyers are generally younger, hence can take a longer loan.

For big quantum property like landed or luxury apartment, the impact might be greater because the profile of such buyer are generally older.

But this cooling measure should not affect the market too much.

[economist]

Actually, this is really a good policy, imagine if SIBOR does go to 2-2.5%, and mortgage rate therefore goes to 3.5%, those people who find themselves paying 60% of income as debt services probably shouldn't have bought the house in the first place. Therefore, it is good to stablise the market and prevent from forced selling in the future.

This should actually be CM1, not CM8.

[DKSG]

depend which segment of the market. For mass market, I think the impact will be negligible because quantum is small and buyers are generally younger, hence can take a longer loan.

For big quantum property like landed or luxury apartment, the impact might be greater because the profile of such buyer are generally older.

But this cooling measure should not affect the market too much.

Again ... If u have been to the showflats you will know that the opposite if true ...

Mass market is flooded with youngsters and sons and daughters of cheongsters uncles!
Lux market are dominated by rich foreigners who doesn't give a hoot (except that they really hoot)... About LTV ... To them money in Sg is the safest compared to their other choices..

Again, Office Boy can't say too much ...

DKSG

[Ringo33]

Again ... If u have been to the showflats you will know that the opposite if true ...

Mass market is flooded with youngsters and sons and daughters of cheongsters uncles!
Lux market are dominated by rich foreigners who doesn't give a hoot (except that they really hoot)... About LTV ... To them money in Sg is the safest compared to their other choices..

Again, Office Boy can't say too much ...

DKSG

you could be right. but I think this new ruling will only further drive more marginalized buyer towards OCR property.

[DKSG]

you could be right. but I think this new ruling will only further drive more marginalized buyer towards OCR property.

We will know in 12 hours time when a CCR condo is soft launched ...

If the results is like 50% sold on first day, then we know that the OCR enthusiasm is spilling into the CCR.

It doesn't take genius to decide that buying a FH CCR studio at $2,000 psf is a much better deal that a Jurong 99LH for $1,800 psf?

DKSG

[狮子王]

We will know in 12 hours time when a CCR condo is soft launched ...

If the results is like 50% sold on first day, then we know that the OCR enthusiasm is spilling into the CCR.

It doesn't take genius to decide that buying a FH CCR studio at $2,000 psf is a much better deal that a Jurong 99LH for $1,800 psf?

DKSG

which CCR condo may i ask ? now need to monitor personally liao

[DKSG]

which CCR condo may i ask ? now need to monitor personally liao

Monitor or go and Hoot one unit ??!!

One Bal-moral ...

DKSG

[Ringo33]

It doesn't take genius to decide that buying a FH CCR studio at $2,000 psf is a much better deal that a Jurong 99LH for $1,800 psf?

DKSG

no right or wrong answer here. Some prefer to be a big fish in a small pond, while others dont mine being a small fish in the big pond.

Having said that, Belmoral area has never been popular place for rental or 1 bedder apartment. Perhaps the lack of singles community for social gathering is making the place less popular among 1 bedder tenant.

[狮子王]

Monitor or go and Hoot one unit ??!!

One Bal-moral ...

DKSG

monitor only la. i want to see how the real reaction like u suggested.

[newbie11]

1 balmoral. any bet on the take up rate?

[狮子王]

no right or wrong answer here. Some prefer to be a big fish in a small pond, while others dont mine being a small fish in the big pond.

Having said that, Belmoral area has never been popular place for rental or 1 bedder apartment. Perhaps the lack of singles community for social gathering is making the place less popular among 1 bedder tenant.

but balmoral can walk to Orchard leh. I think the Jewel@Balmoral behind the hill can walk to Shaw Plaza tiobo ?

[newbie11]

no right or wrong answer here. Some prefer to be a big fish in a small pond, while others dont mine being a small fish in the big pond.

Having said that, Belmoral area has never been popular place for rental or 1 bedder apartment. Perhaps the lack of singles community for social gathering is making the place less popular among 1 bedder tenant.

resale 3br 2.2m 4.5-5k rental.
then again, this area has a lack of 1br.. but anw ccr should continue to be quiet...........

[newbie11]

but balmoral can walk to Orchard leh. I think the Jewel@Balmoral behind the hill can walk to Shaw Plaza tiobo ?

bro u walk and tell me can or not? and if u can walk back to jewel, i treat u massage.

[economist]

Please share your observations tomorrow, sure many are curious.

My feel regarding the percentage of buyers affected could be around 10%, which means minimal impact, and maybe easily offset by the usual sentiment of -- would one more CM come and would it make buying more difficult?

We can laugh at this sentiment, but I always feel that sentiment is more of a deciding factor in property market. However laughable, if it is real, then it is something so we shall observe.

[DKSG]

Please share your observations tomorrow, sure many are curious.

My feel regarding the percentage of buyers affected could be around 10%, which means minimal impact, and maybe easily offset by the usual sentiment of -- would one more CM come and would it make buying more difficult?

We can laugh at this sentiment, but I always feel that sentiment is more of a deciding factor in property market. However laughable, if it is real, then it is something so we shall observe.

Wah! Now u all are sounding like my Bosses leh ... I bobian have to go that showflat tomorrow arh ???

Very pai tan ...

DKSG

[economist]

Wah! Now u all are sounding like my Bosses leh ... I bobian have to go that showflat tomorrow arh ???

Very pai tan ...

DKSG

Haha, that's because you are the most hard working one here...