The requirements for borrowers to prove sale of their existing property and even the fact that their potential buyers of their existing property had paid the stamp duty before the bank can loan them 80% is creating quite a stir amongst many genuine home buyers. Some experts (as I've read) have projected that sellers may therefore negotiate with their buyers for a longer duration instead of the typical 8 to 10 weeks before they hand over the keys. I am skeptical about this.
While it may be true that sellers would probably start to negotiate longer durations like 14wks before handing the house over to the buyer, this system is designed for self destruction. The sellers extend the no. of wks because they are looking to secure another apartment to move in. However, when they look around, they become the buyers and their potential seller would also negotiate similar extension of no. of wks therefore after 14 wks, this poor guy still don't have house to stay because his newly bought house is not ready.
This is a vicious cycle that the introduced measure creates. Therefore, asking for extension is not the solution to the problem. This problem was never an issue before 30 August 2010 because there is no need to show documents of sale for current property before bank would loan you $$. The demand for proof is so flawed.
Just put measures in place to ensure that our current houses be sold within a certain duration after buying next property. Just tighten this measure by imposing fines on any such violations to solve the problem easily.
. Doubtless to say, more work on the part of the relevant authorities.
Many may easily argue that no $ so don't buy house la... As much as I agree with the saying but I would also add that if Singapore wants to advance in economy and attract FTs and foreign investments, we'll need locals to push the economy too otherwise we'll need so much FT and foreigners that singaporeans only occupy 30% of population. One of the ways for locals to push the economy is for a strong upgrading and constantly improving mentality. (Of course property upgrading is not directly indicative of a growing economy but it sure has its impact).
In the past, if they can afford 20%, we encourage them to upgrade. Now, they must afford 30% then we encourage them to upgrade. Is there a cap? 6 months down the road, when 30% still don't work, then up the LTV to 50%? Where do we stop? We cannot expect everyone who aspires to upgrade to remain in HDB till the day they can pay 100% cash for condo or landed, can we? These guys, by not being able to upgrade, will also prevent poorer individuals a place in the highly coveted and subsidized HDB flats.
I called my banker to make some enquiries and he reflected to me that there have been many genuine upgraders calling in with very difficult situations as a direct result of these new rulings.
My question to the relevant authorities is this, 'If your initial objective (as published so widely in papers and even in PM's speech) is to curb housing speculations, then why are there so many genuine home buyers (not speculators) feeling the pain. Are these measures ultimately effective? Can we make adjustments to these measures of maybe, just maybe introduce other more effective measures. Thank you.
Originally Posted by apple3
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