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Thread: Government announces 2 measures to cool property market

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    Default Government announces 2 measures to cool property market

    Government announces 2 measures to cool property market

    19 February 2010 1752 hrs (SST) 0952 hrs (GMT)

    SINGAPORE: The Government has introduced two new measures to cool the property market and pre-empt a bubble from forming in the private homes sector. They come into effect Saturday.

    The Ministry of National Development said this will help ensure a stable and sustainable property market, and to curtail the HDB resale market where prices tend to track private property movements.

    From Saturday, it will be more difficult and expensive for speculators to own and flip properties. A Seller's Stamp Duty will be imposed on all residential properties and residential land bought after Friday, and sold within one year from the date of purchase.

    The housing loan limit will also be capped at 80 per cent - down from the current 90 per cent.

    This new loan limit will apply to all housing loans granted by financial institutions for private homes, executive condominiums, HUDC flats and HDB flats, including those sold under the Design, Build and Sell Scheme. But loans granted by the Housing and Development Board (HDB) for flats, will still have a cap of 90 per cent.

    Last September, the Government introduced anti-speculative measures to cool the private homes market. While these helped initially, there were signs the market was heating up again.

    The new measures come as demand for private homes continues to soar. The number of units sold by developers in January was three times more than December. It was also the highest monthly total since September last year.

    The Ministry said the objective of these measures is to discourage short-term speculative activity that could distort underlying prices. It is not targeted at the purchase of properties for owner occupation or longer term investment.

    Market watchers said the measures are easiest to implement, without causing the market to come to a standstill.

    Eugene Lim, associate director, ERA Asia Pacific said: "We are recovering. The economy is recovering and the market is picking up so what they want to do is to make sure the property market is moving up in tune together with the economy and not faster than the economic recovery."

    Analysts added that the prices and volume of private property homes are unlikely to be significantly impacted.

    Donald Han, managing director, Cushman & Wakefield said: "It has got a fairly minimal impact to the market, mainly because a lot of investors from our records are buying for the medium term, at least for a period of two to three years.

    "Some investors will probably stand by the sidelines and see how sales progress into February and March. It will take some wind out of the market; potentially it could be around 10-15 per cent in terms of the numbers of new home sales taken out of the equation."

    The Real Estate Developers' Association of Singapore said the reduced mortgage cap is unlikely to have significant impact on genuine buyers and investors, as lending institutions have already been more prudent in the aftermath of the global financial crisis.

    - CNA/sc

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    GAME OVER ??

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    i don't know what the f**k our govt is trying to do? Playing devil and angel as usual. Penalty for sellers who sell within 1 year sounds very much like HDB ruling and what business does the govt have to impose such control on private property? People buy private property for the sheer reason that they do not have to be subjected to minimum occupations like hdb but now the govt's arbitrary policies are creeping into the private property market. F**k to them is all i can say....KNNBCB

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    Seriously, this can only be good news to current property owners. The ruling will only take effect on properties bought tomorrow and sold within 1 year. This means newer properties are sold higher and current homeowners get the edge. Ultimately, this should only affect sellers, not buyers. Less sellers = less competition. BUT... with the speculators cut out now, there will somewhat be less activity on the market and developers will somewhat be more cautious with their pricing. This means a slower but more resilient market.

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    Quote Originally Posted by pmet
    Seriously, this can only be good news to current property owners.
    Of course it's good news!

    Now there will be fewer people selling properties.

    Let me predict the effects:

    1. Many sellers will withdraw their properties from the market. This will choke off the supply in the secondary market.

    2. The sellers who have held their properties for more than 1 year will have fewer competitors.

    3. Those sellers who have held their properties fewer than 1 year may try to add their stamp duty into the asking price.

    4. Anyone who wants to buy a property for own stay or long term investment, but does not want to pay the seller's stamp duty, will have no choice but to buy direct from the developers.

    5. What will the developers do?

    6. My property spreadsheet numbers will be going up yet again!

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    Quote Originally Posted by jlrx
    Of course it's good news!

    Now there will be fewer people selling properties.

    Let me predict the effects:

    1. Many sellers will withdraw their properties from the market. This will choke off the supply in the secondary market.

    2. The sellers who have held their properties for more than 1 year will have fewer competitors.

    3. Those sellers who have held their properties fewer than 1 year may try to add their stamp duty into the asking price.

    4. Anyone who wants to buy a property for own stay or long term investment, but does not want to pay the seller's stamp duty, will have no choice but to buy direct from the developers.

    5. What will the developers do?

    6. My property spreadsheet numbers will be going up yet again!
    I agree.... minimum impact to genuine buyers who buy for mid or long term view.. remember the other 4 year period rule? More could be implemented by the Government in time to come if necessary.

    What this could result is that at current prices, developer can clear stocks and increase prices without the specuvestors disturbing their sales within 1 year from date of sale unless the price differential is attractive enough for sellers to pay the seller's stamp duty.

    Next, for those who bought prior to tomorrow, they are better off in terms of competition and could maintain that advantage. Less Supply from secondary market. Primary market is not really affected. This should please the developers.

    If you have holding power, all these would not really affect you unless the property index falls. Otherwise, inflation should maintain or inflate it further... I would be careful if buying now as I have the extra factor to consider... BTW, is the sellers stamp duty punitive enough? What is the rate?

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    I think developers will be hit the hardest. If I am a buyer, I will be thinking if I buy Altez 2 bedders at 2150 psf, knn, at what price you want me to sell? 6% stamp duty, 1.5% bank penalty, 2% agent fee, almost 10% in total. So if I think I cannot sell at 2350 psf, then of course I won't buy. So projects like Altez will be hit the hardest. Unless people buy for own stay but how many would actually buy Altez for own stay?

    And now, buyers will also be cautious. Double stamp duty if want to flip. But genuine buyers should not be affected. Will prices remain? I think so. But if drop, I think the government will face backlash from BOTH HDB buyers and private properties owner so the government better pray hard it doesn't hit the market too hard. GE is just in time to see the effects of this policy. And to me, it is not about justification from the government. The thing is, many people will vote opposition because asset prices are dropping because of government intervention. It has came too early this time I feel.

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    Clearly is aimed at flippers, nice ~

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    Quote Originally Posted by pmet
    Seriously, this can only be good news to current property owners. The ruling will only take effect on properties bought tomorrow and sold within 1 year. This means newer properties are sold higher and current homeowners get the edge. Ultimately, this should only affect sellers, not buyers. Less sellers = less competition. BUT... with the speculators cut out now, there will somewhat be less activity on the market and developers will somewhat be more cautious with their pricing. This means a slower but more resilient market.
    agree.. looks like the prices will still rise as the property market becomes more stable and sustainable with the new measures

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    Quote Originally Posted by august
    Clearly is aimed at flippers, nice ~
    aiya...our garment so smart..make it sound as if they want to cool dwn property $ but in actual fact they just want a piece of yr profit :P

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    i believe these measures will translate into a slower, stable property market as the flippers are taken out of the equation. With the possible raise of interest in the near future and decline in the loan ceiling to 80%, this will also meant that less buyers (genuine but limited in cash) to get into the market.

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    Quote Originally Posted by paulho77
    aiya...our garment so smart..make it sound as if they want to cool dwn property $ but in actual fact they just want a piece of yr profit :P
    They will probably take $10 and return only $1 during the Budget? haha...

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    Default IMHO

    This sellers stamp duty and 80% cap on loan are mild curbs and targeted specifically at speculators.

    I don't think any genuine buyer would buy today with the intention of selling within a year or with > 80% loan.

    I support this new rule as it removes speculators and marginal buyers .... so we will not end up in the subprime crisis like our American friends.

    Honestly I think the government has got it right and on time now.....unlike 1996 when it was a goofup, to much curb too late. Now its mild curbs way early in the game.

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    govt says hdb is not for investment, if want to invest buy pte. Now pte oso want to control n penalise. Investment can be short or long term n if owners sell wthin a year, it is called short term investment so wat is the garmen's problem? All investments are speculative in nature n there is no such thng as sure eat (bao jia)
    Quote Originally Posted by Localite
    This sellers stamp duty and 80% cap on loan are mild curbs and targeted specifically at speculators.

    I don't think any genuine buyer would buy today with the intention of selling within a year or with > 80% loan.

    I support this new rule as it removes speculators and marginal buyers .... so we will not end up in the subprime crisis like our American friends.

    Honestly I think the government has got it right and on time now.....unlike 1996 when it was a goofup, to much curb too late. Now its mild curbs way early in the game.

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    Quote Originally Posted by Condorich
    I agree.... minimum impact to genuine buyers who buy for mid or long term view.. remember the other 4 year period rule? More could be implemented by the Government in time to come if necessary.

    What this could result is that at current prices, developer can clear stocks and increase prices without the specuvestors disturbing their sales within 1 year from date of sale unless the price differential is attractive enough for sellers to pay the seller's stamp duty.

    Next, for those who bought prior to tomorrow, they are better off in terms of competition and could maintain that advantage. Less Supply from secondary market. Primary market is not really affected. This should please the developers.

    If you have holding power, all these would not really affect you unless the property index falls. Otherwise, inflation should maintain or inflate it further... I would be careful if buying now as I have the extra factor to consider... BTW, is the sellers stamp duty punitive enough? What is the rate?
    I have been preaching the Propertism religion to deaf ears, but now the Government has come up with measures to encourage Propertism!

    Propertism Rule No. 1 - Properties should only be bought. Not sold.

    I always believe that property prices will go up in the long term, to whatever levels they rightfully belong, whether or not there are speculators in the market.

    For example, surely there is no way that a 30,000 sq ft Queen Astrid Park GCB asking $500,000 in 1977 can still be priced at $500,000 today. Otherwise everyone who stays in an HDB flat will be able to afford a GCB! How can that be? There are simply not enough GCBs to go around.



    Unfortunately, the seller's stamp duty of up to 3 percent is, in my view, not enough to enforce strict Propertism behaviour in everyone.

    I would like to see a higher stamp duty like 30 percent for the first 10 years; 20 percent for the next 10 years; 10 percent for the next 10 years; and zero percent thereafter.

    It would be even better if the seller's stamp duty applies to developers selling condos and HDB selling BTO flats as well. This will instill a discipline to all the developers, including HDB, to hold on to their properties like what Far East had been doing, and sell slowly, trickle by trickle, over many many years.

    In fact, if a 30 percent stamp duty is whacked on all sellers, including developers and HDB, there will be hardly any new flats for the next 30 years (unless the buyers are willing to absorb the developers' or HDB's stamp duty). There will be no more new BTO HDB flats for next 30 years, and no more new condo launches.

    The only people who can sell properties without paying stamp duties will be those few who have held on to their properties for more than 30 years!

    Another source of supply will be Far East, which has some properties like The Bayshore which had been around for 10+ years, so their stamp duty will be only 20%, giving them pricing advantage relative to other developers.

    Those who practice Propertism should be rewarded.

    Can you imagine what will happen to property prices in Singapore?

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    i see u have the intention to leave ur properties to ur children and grandchildren. i dont think people here think as far as you and people are not content watching the waves, they want to ride it.


    Quote Originally Posted by jlrx
    I have been preaching the Propertism religion to deaf ears, but now the Government has come up with measures to encourage Propertism!

    Propertism Rule No. 1 - Properties should only be bought. Not sold.

    I always believe that property prices will go up in the long term, to whatever levels they rightfully belong, whether or not there are speculators in the market.

    For example, surely there is no way that a 30,000 sq ft Queen Astrid Park GCB asking $500,000 in 1977 can still be priced at $500,000 today. Otherwise everyone who stays in an HDB flat will be able to afford a GCB! How can that be? There are simply not enough GCBs to go around.



    Unfortunately, the seller's stamp duty of up to 3 percent is, in my view, not enough to enforce strict Propertism behaviour in everyone.

    I would like to see a higher stamp duty like 30 percent for the first 10 years; 20 percent for the next 10 years; 10 percent for the next 10 years; and zero percent thereafter.

    It would be even better if the seller's stamp duty applies to developers selling condos and HDB selling BTO flats as well. This will instill a discipline to all the developers, including HDB, to hold on to their properties like what Far East had been doing, and sell slowly, trickle by trickle, over many many years.

    In fact, if a 30 percent stamp duty is whacked on all sellers, including developers and HDB, there will be hardly any new flats for the next 30 years (unless the buyers are willing to absorb the developers' or HDB's stamp duty). There will be no more new BTO HDB flats for next 30 years, and no more new condo launches.

    The only people who can sell properties without paying stamp duties will be those few who have held on to their properties for more than 30 years!

    Another source of supply will be Far East, which has some properties like The Bayshore which had been around for 10+ years, so their stamp duty will be only 20%, giving them pricing advantage relative to other developers.

    Those who practice Propertism should be rewarded.

    Can you imagine what will happen to property prices in Singapore?

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    QAP is way over rated, take a drive there today and you will see that many houses there are quite run down......yep they really look like sh*t, like they are owned by people who only made $500k their whole lives and worst part is they are still staying there and will probably die there too and at over $10 million for most houses in QAP, barriers to entry is very high, so little chance for noveau riche to buy there and make renewal to the old estate.

    Come to Siglap and there is much renewal with many stunning new houses on hills with city views.

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    bypass QAP and make a turn into Astrid Hill, see K shanmugum's house at number 7 and the huge houses wth nice architecture along that stretch n u will change ur opinion.
    Quote Originally Posted by xebay11
    QAP is way over rated, take a drive there today and you will see that many houses there are quite run down......yep they really look like sh*t, like they are owned by people who only made $500k their whole lives and worst part is they are still staying there and will probably die there too and at over $10 million for most houses in QAP, barriers to entry is very high, so little chance for noveau riche to buy there and make renewal to the old estate.

    Come to Siglap and there is much renewal with many stunning new houses on hills with city views.

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    Quote Originally Posted by xebay11
    QAP is way over rated, take a drive there today and you will see that many houses there are quite run down......yep they really look like sh*t, like they are owned by people who only made $500k their whole lives and worst part is they are still staying there and will probably die there too and at over $10 million for most houses in QAP, barriers to entry is very high, so little chance for noveau riche to buy there and make renewal to the old estate.

    Come to Siglap and there is much renewal with many stunning new houses on hills with city views.
    When they pass on and they children squabble over the property, maybe can get 10mil house for 7?

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    Quote Originally Posted by xebay11
    Come to Siglap and there is much renewal with many stunning new houses on hills with city views.
    West sun pal.

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    Quote Originally Posted by paulho77
    aiya...our garment so smart..make it sound as if they want to cool dwn property $ but in actual fact they just want a piece of yr profit :P
    Yah lah ... this one sounds more logical lah. Simi to penalise flippers? More like asking the sellers to price in the stamp duty & push prices up higher, then they can come in to officially 'tax' & earn their share of $$ mah

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    This is double taxation by the govt. 1st shot on seller stamp duty, then later tax on balance capital gain!

    The only way is UP!!! Property selling prices will be priced even higher instead of softer to cover for all these taxes and duties!

    The only element that will cool down property mkt is interest rate hike!

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    Home buyers still flock to showrooms despite new property measures

    20 February 2010 2005 hrs (SST) 1205 hrs (GMT)

    SINGAPORE: New measures kicked in on Saturday to curb speculation in the property market.

    A Seller's Stamp Duty will be imposed on all residential properties bought on Saturday and sold within one year, while housing loans from financial institutions will be capped at 80 percent of property value.

    Are they taking the buzz out of the property market? Not yet - at least not for those who are buying for the long-term.

    It was business as usual at one property showroom on Saturday, as a steady stream of visitors checked out the units available.

    Sales of units at the Altez condominium - located just opposite Tanjong Pagar MRT station - are moving fast.

    One woman in her 30s snapped up four units - two to stay in and two to rent out.

    The condominium's developer said they could still sell an entire floor of units within an hour.

    Some home buyers said the reduction in the home loan limit did not make much of a difference.

    Home buyer Raphael Tan said: "The banks have been very strict, anyway. So I think we will still be on track for our financing."

    And those who are buying for the long-term are not worried about the new Seller's Stamp Duty.

    Doris Chia, another home buyer, said: "Although it's quite pricey now, I think this is a good location and for long-term investment."

    Analysts expect developers to launch more high-end properties in the first half of this year.

    These properties typically sell at S$2,000 per square foot and attract buyers and investors who are less price-sensitive.

    Donald Han, managing director of Cushman and Wakefield, said: "A lot of the high-end investors are typically not bound by any limitation. They don't go for maximum loan-to-value ratio. In some cases, they just go for 40 to 50% of loan-to-value ratio. In some cases, they even buy on a cash basis."

    Analysts said the mood to buy won't change much as the measures are meant to flush out speculators, who make up a small percentage of the market.

    Meanwhile, Senior Minister of State for National Development Grace Fu said that now is the time to introduce measures to control the private property market.

    She said the authorities have been studying the property market closely and that it is best to introduce the measures before the property bubble forms.

    "We would think that it may deter speculative buying and we want our investors to basically be on the more solid ground when they invest in properties. It should not deter genuine buyers who have the financial resources to hold the property."

    - CNA/ir

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    Quote Originally Posted by Regulators
    bypass QAP and make a turn into Astrid Hill, see K shanmugum's house at number 7 and the huge houses wth nice architecture along that stretch n u will change ur opinion.
    I know that area very well, used to live around there in the 90s, thought that the houses there looked good back then, but my recent tour to familiarise my 12 yo daughter with properties there made me feel disappointed as she kept asking me why the houses were so highly priced and nothing to shout about. Of course like you say, there are a few gems and palatial homes here and there.

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    Quote Originally Posted by Property_Owner
    West sun pal.
    True that, a pity really, but some of the houses have very open flow through designs so don't think heat retention is a problem.

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    Quote Originally Posted by xebay11
    True that, a pity really, but some of the houses have very open flow through designs so don't think heat retention is a problem.

    No matter what you done to your house that west facing nothing much will cool off e heat, go ask those that stay Belvedere that have very nice city view how hot is their house... I bought a west sun unit some decades back, only to stay for 2 weeks.

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    Never, ever, ever... buy a property with west sun facing your bedrooms

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    Quote Originally Posted by Regulators
    bypass QAP and make a turn into Astrid Hill, see K shanmugum's house at number 7 and the huge houses wth nice architecture along that stretch n u will change ur opinion.
    I can't find house No. 7 Astrid Hill in map.gov.sg. There is house No. 9 but no house No. 7. Have they merged it or something?

    I also went "sightseeing" using Googlemaps Streetview, but can't find No. 7 either.

    Quote Originally Posted by xebay11
    I know that area very well, used to live around there in the 90s, thought that the houses there looked good back then, but my recent tour to familiarise my 12 yo daughter with properties there made me feel disappointed as she kept asking me why the houses were so highly priced and nothing to shout about. Of course like you say, there are a few gems and palatial homes here and there.
    You should tell her "Look at the land, not the houses".

    It's good that you start training her from young.

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    i am referring to the one beside number 8. I thought that is number 7 or perhaps it is 6 or 9, but again the Minister of Law can change his house to any address he wants lol House is a short drive in frm the gate.
    Quote Originally Posted by jlrx
    I can't find house No. 7 Astrid Hill in map.gov.sg. There is house No. 9 but no house No. 7. Have they merged it or something?

    I also went "sightseeing" using Googlemaps Streetview, but can't find No. 7 either.



    You should tell her "Look at the land, not the houses".

    It's good that you start training her from young.

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    Quote Originally Posted by Regulators
    i am referring to the one beside number 8. I thought that is number 7 or perhaps it is 6 or 9, but again the Minister of Law can change his house to any address he wants lol House is a short drive in frm the gate.
    Are you referring to house No. 6 (below), which is on the left of house No. 8?

    Google Maps Street View


    The houses numbers are, from left to right, 5, 6, 8, 9A, 9.

    Nowadays with Google Maps Street View, I can go house viewing without getting out of my house!

    But the draw back is that the photos were taken more than a year back hence some may be outdated (such as the one above which might already have finished with its renovation).

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