Do property curbs help or hurt?

[reporter2]

http://www.straitstimes.com/forum/le...s-help-or-hurt

Do property curbs help or hurt?

Apr 11, 2016


The Additional Buyer's Stamp Duty (ABSD) of up to 15 per cent is for the purchase of investment properties and serves as a housing tax for foreigners. Meant to reduce the "investment viability" of properties and give owner-occupiers a higher chance of buying a home, buying a second property became a more expensive affair because of it.

Before the cooling measures were introduced, mass-market properties primarily catered to HDB upgraders and first-time home buyers, while higher-end properties were more for higher-income earners, investors and expatriates.

The ABSD made the second group turn to mass-market properties, pushing up prices in this market.

The rising Singapore interbank offered rate (Sibor), which is used to price home loans, could damage livelihoods, as mortgage payments rise in tandem with it.

Traditionally, if mortgage payments start getting too high, owners would sell off the property and/or downgrade, to reduce debt exposure and reallocate resources.

With the absence of liquidity in the market, this will be difficult.

The property auction market is also starting to get uncomfortably active. Last year, mortgagee sales - when a bank puts a property up for auction after its owner defaults on servicing the home loan - almost doubled the preceding year's figure ("More homes go on the block amid market turmoil"; Feb 19).

Together with the bleak economic outlook and weak equities market, if we blindly stick to the status quo, we are in for a rough year ahead.

Russell Lee Pynn

[teddybear]

Didn't I say this is the reason why OCR private property prices are persisting at near peak price despite CCR having crashed?
No brainer!
But the policy makers either don't get it or refuse to act, either way, this just show their incompetence???

http://www.straitstimes.com/forum/le...s-help-or-hurt

Do property curbs help or hurt?

Apr 11, 2016


The Additional Buyer's Stamp Duty (ABSD) of up to 15 per cent is for the purchase of investment properties and serves as a housing tax for foreigners. Meant to reduce the "investment viability" of properties and give owner-occupiers a higher chance of buying a home, buying a second property became a more expensive affair because of it.

Before the cooling measures were introduced, mass-market properties primarily catered to HDB upgraders and first-time home buyers, while higher-end properties were more for higher-income earners, investors and expatriates.

The ABSD made the second group turn to mass-market properties, pushing up prices in this market.

The rising Singapore interbank offered rate (Sibor), which is used to price home loans, could damage livelihoods, as mortgage payments rise in tandem with it.

Traditionally, if mortgage payments start getting too high, owners would sell off the property and/or downgrade, to reduce debt exposure and reallocate resources.

With the absence of liquidity in the market, this will be difficult.

The property auction market is also starting to get uncomfortably active. Last year, mortgagee sales - when a bank puts a property up for auction after its owner defaults on servicing the home loan - almost doubled the preceding year's figure ("More homes go on the block amid market turmoil"; Feb 19).

Together with the bleak economic outlook and weak equities market, if we blindly stick to the status quo, we are in for a rough year ahead.

Russell Lee Pynn

[Citizen]

Are you saying that without curbs the OCR prices will not persist at near peak ?

[Kelonguni]

What the Govt say and what they actually mean are two different things.

We must make sure there is enough land to last till 2030. Cannot let them sell out so fast lah.

[Kelonguni]

Mass market had risen very much even before ABSD for 3rd property for Singaporean in 2012?