View Full Version : Bank ask to Top up if Prop falls below Valuation
Chillyred888
19-12-10, 15:11
Hi All,
I have these 2 Scenarios:
1)New not yet TOP project : if selling price is eg. $900k ,if economic crisis came and Valuation of this unit drop to 800k.
Q)Will the Bank ask me to Top up in cash the 100k difference?
2)Re-sale Condo : if bank loan me 900k but my prop value drop to 800k.
Q)Do i still need to be liable and need to Top up cash of 100k,since im already staying there say like few years?
devilplate
19-12-10, 15:28
Hi All,
I have these 2 Scenarios:
1)New not yet TOP project : if selling price is eg. $900k ,if economic crisis came and Valuation of this unit drop to 800k.
Q)Will the Bank ask me to Top up in cash the 100k difference?
2)Re-sale Condo : if bank loan me 900k but my prop value drop to 800k.
Q)Do i still need to be liable and need to Top up cash of 100k,since im already staying there say like few years?
ask the banker....y ask here?:p
Wa.. now got people asking about top-ups..
I remember this happen around the time of the crisis as well..
So now the mood for those on the fringe investors are getting pessismistic? On the verge of unloading to reduce burden on leverage?
proud owner
19-12-10, 16:46
Wa.. now got people asking about top-ups..
I remember this happen around the time of the crisis as well..
So now the mood for those on the fringe investors are getting pessismistic? On the verge of unloading to reduce burden on leverage?
precautionary lah
not necessarily pessimistic
Hi All,
I have these 2 Scenarios:
1)New not yet TOP project : if selling price is eg. $900k ,if economic crisis came and Valuation of this unit drop to 800k.
Q)Will the Bank ask me to Top up in cash the 100k difference?
2)Re-sale Condo : if bank loan me 900k but my prop value drop to 800k.
Q)Do i still need to be liable and need to Top up cash of 100k,since im already staying there say like few years?
yes, some cases require topups.
That why u see in recession, alot of desperate sales.
those with no money to topup, rather dispose it at loss,than to top up more cash.
*cos they can manage the monthly mortgages,but cant manage the topups amount.
devilplate
19-12-10, 16:53
yes, some cases require topups.
That why u see in recession, alot of desperate sales.
those with no money to topup, rather dispose it at loss,than to top up more cash.
*cos they can manage the monthly mortgages,but cant manage the topups amount.
my understand is: as long u can service ur loan...they wun ask for top-up...unless the banks themselves no $$...haha
my understand is: as long u can service ur loan...they wun ask for top-up...unless the banks themselves no $$...haha
ur understanding vs real cases of top up upon TOP especially when valuation drops. which is more real.??
kingkong1984
19-12-10, 18:45
Dun be caught, valuations do go down and if its a net negative, definitely a top up is needed. Banks are not suckers, stupid fools are.
If property is 900k and bank lent you 720k. (80%).
If prices drop to say, 800,000, bank can ask you to top-up the difference (up to the 80% limit again) (720k - 640k == 80k).
If prices drop to say, 700k, good luck to the bank. Even if the bank force sale the property, it still loses 20k, so if you continue to service the monthly mortgage, unlikely the bank will do a force sale.
My 2c base on my understanding.
ymgsterling
19-12-10, 19:14
If property is 900k and bank lent you 720k. (80%).
If prices drop to say, 800,000, bank can ask you to top-up the difference (up to the 80% limit again) (720k - 640k == 80k).
If prices drop to say, 700k, good luck to the bank. Even if the bank force sale the property, it still loses 20k, so if you continue to service the monthly mortgage, unlikely the bank will do a force sale.
My 2c base on my understanding.
Understanding my banker before I sign up for my
loan last month;
Local bank will not ask to top up unless you
are not able to service your loan.
However, do note contractually, they have a
right to do so.
Typically, this only happens to mortage loan from
foreign banks, where these foreign banks want
to pull out their operations during crisis.
Squall8888
19-12-10, 19:39
If you are servicing your loan promptly, there is no top up. It doesn't make sense when the bank gets back negative amount and you don't have anything else to pay. And the bank end up a bigger loser. They are not suckers as what you said so no. Pay your installment promptly and you will be fine.
Dun be caught, valuations do go down and if its a net negative, definitely a top up is needed. Banks are not suckers, stupid fools are.
If you are servicing your loan promptly, there is no top up. It doesn't make sense when the bank gets back negative amount and you don't have anything else to pay. And the bank end up a bigger loser. They are not suckers as what you said so no. Pay your installment promptly and you will be fine.
Quote:
Originally Posted by kingkong1984
Dun be caught, valuations do go down and if its a net negative, definitely a top up is needed. Banks are not suckers, stupid fools are
From what I recall based on the experience of the 1997 Asian Financial Crisis. There were many who were asked to top-up despite being able to service the loans promptly when their properties went into negative equity.
What happened then to some speculators was that they took on multiple property loans with the same bank and all the properties went into negative equity. Considering that CPF has first charge, the bank is at a very real risk of being unable to recoup even its principal. The bank may then ask for a top-up of the property that is non-resident (therefore an investment property). This brankrupted some speculators during that time.
Regulators
19-12-10, 21:12
are you a korean with a younger son and older daughter?
If property is 900k and bank lent you 720k. (80%).
If prices drop to say, 800,000, bank can ask you to top-up the difference (up to the 80% limit again) (720k - 640k == 80k).
If prices drop to say, 700k, good luck to the bank. Even if the bank force sale the property, it still loses 20k, so if you continue to service the monthly mortgage, unlikely the bank will do a force sale.
My 2c base on my understanding.
devilplate
19-12-10, 21:39
From what I recall based on the experience of the 1997 Asian Financial Crisis. There were many who were asked to top-up despite being able to service the loans promptly when their properties went into negative equity.
What happened then to some speculators was that they took on multiple property loans with the same bank and all the properties went into negative equity. Considering that CPF has first charge, the bank is at a very real risk of being unable to recoup even its principal. The bank may then ask for a top-up of the property that is non-resident (therefore an investment property). This brankrupted some speculators during that time.
i tot CPF 2nd charge?
how about the person nvr use CPF?
but y wud the bank ask for top up if borrower can service the loan? if cannot top-up, force sale?
last yr, banks actually restructured those who defaulted on their installment ...temp interest only loan....
Chillyred888
19-12-10, 21:56
yes, some cases require topups.
That why u see in recession, alot of desperate sales.
those with no money to topup, rather dispose it at loss,than to top up more cash.
*cos they can manage the monthly mortgages,but cant manage the topups amount.
if one cant top up required by bank,will they force sell your property,den legally ask you to pay back by instalment to make up their negative losses /minus off what you have paid(initial 20% dwnpayment)?
Chillyred888
19-12-10, 22:03
yes, some cases require topups.
That why u see in recession, alot of desperate sales.
those with no money to topup, rather dispose it at loss,than to top up more cash.
*cos they can manage the monthly mortgages,but cant manage the topups amount.
mine is a case of can manage mthly mortgages but cant manage any top up for now cos of other commitments
Don't anyhow spread rumors lah. Where got people can pay instalments promptly got asked to top up when property in negative equity? If have pls state the bank name for the benefits of all here. :cheers1:
More like miss or late payment then get bank asking for top up! This has happened before, remember somebody write to ST Forum complaining about this and end up bank clarifying with strong words that it is the complainer who pay late first and then the complainer shut up after that. So lesson learnt is: Never Never miss or pay late any monthly instalment payment!
From what I recall based on the experience of the 1997 Asian Financial Crisis. There were many who were asked to top-up despite being able to service the loans promptly when their properties went into negative equity.
What happened then to some speculators was that they took on multiple property loans with the same bank and all the properties went into negative equity. Considering that CPF has first charge, the bank is at a very real risk of being unable to recoup even its principal. The bank may then ask for a top-up of the property that is non-resident (therefore an investment property). This brankrupted some speculators during that time.
i tot CPF 2nd charge?
how about the person nvr use CPF?
but y wud the bank ask for top up if borrower can service the loan? if cannot top-up, force sale?
last yr, banks actually restructured those who defaulted on their installment ...temp interest only loan....
Before 2003, CPF was first charge.
Topping-up of value was a risk management manouevre by the bank. There will be a bigger loss if the the property devalues further and the loaner defaults later. The more loans you have with the bank means the bank has a higher exposure to that loss.
This was done selectively and highly leveraged speculators were targetted rather than owner-occupiers. Many speculators nowadays prefer to loan with different banks for different properties in order to able to escape the radar of any individual bank.
Cheers
Chillyred888
19-12-10, 23:05
Before 2003, CPF was first charge.
Topping-up of value was a risk management manouevre by the bank. There will be a bigger loss if the the property devalues further and the loaner defaults later. The more loans you have with the bank means the bank has a higher exposure to that loss.
This was done selectively and highly leveraged speculators were targetted rather than owner-occupiers. Many speculators nowadays prefer to loan with different banks for different properties in order to able to escape the radar of any individual bank.
Cheers
as a 1st time buyer,strong in monthly repayment but not much $ to top up in worst case scenario..seems like i am safe?
or am i taking too much risk to commit in property now that prices went up so much,for fear it also come down fast
as a 1st time buyer,strong in monthly repayment but not much $ to top up in worst case scenario..seems like i am safe?
or am i taking too much risk to commit in property now that prices went up so much,for fear it also come down fast
In my unqualified opinion, you are safe. Good Luck and have fun shopping for your dream home.
Current fiscal measures protect the bank, ie. 80% loan quantum on 1st property and 70% loan on 2nd, plus the bank has first charge ahead of CPF. Therefore the chances of the bank invoking the contractual clause to require loans to be topped up are extremely low as they are protected by a 20-30% margin.
All the best!
Chillyred888
20-12-10, 09:02
In my unqualified opinion, you are safe. Good Luck and have fun shopping for your dream home.
Current fiscal measures protect the bank, ie. 80% loan quantum on 1st property and 70% loan on 2nd, plus the bank has first charge ahead of CPF. Therefore the chances of the bank invoking the contractual clause to require loans to be topped up are extremely low as they are protected by a 20-30% margin.
All the best!
thks for your "unqualified opinion" in the most resourceful way!;)
may i know what is "First charge ahead of cpf'?
btw,my cpf OA will all b wipe out to use for housing
when you say bank r protected by 20-30% margin, does it mean if current TOP or exisiting condo u staying if drop to 30%in value,den chances r the bank might ask for top up in cash?
Don't anyhow spread rumors lah. Where got people can pay instalments promptly got asked to top up when property in negative equity? If have pls state the bank name for the benefits of all here. :cheers1:
More like miss or late payment then get bank asking for top up! This has happened before, remember somebody write to ST Forum complaining about this and end up bank clarifying with strong words that it is the complainer who pay late first and then the complainer shut up after that. So lesson learnt is: Never Never miss or pay late any monthly instalment payment!
Absolutely true....so far in spore, under normal circumstances bank to not practice "top up" even if valuation fall below loan quantum...else 10 yrs ago i already commited suicide. But still.. the was lesson learnt, never leverage too much, especially on 2nd property onwards. Now i am more conservative, infact already consider 'kia si' i think .... Holding on to a negative equity for a decade is no joke even if there are tenants paying for your installments. :tsk-tsk:
Chillyred888
20-12-10, 09:17
Absolutely true....so far in spore, under normal circumstances bank to not practice "top up" even if valuation fall below loan quantum...else 10 yrs ago i already commited suicide. But still.. the was lesson learnt, never leverage too much, especially on 2nd property onwards. Now i am more conservative, infact already consider 'kia si' i think .... Holding on to a negative equity for a decade is no joke even if there are tenants paying for your installments. :tsk-tsk:
ha..so i considered a Kia Su 1st time property hunter..:D may i know how much your prop drop 10 years ago?
is it that when u face negative equity,you might have to top up your mortgage minus rental proceeds?
Absolutely true....so far in spore, under normal circumstances bank to not practice "top up" even if valuation fall below loan quantum...else 10 yrs ago i already commited suicide. But still.. the was lesson learnt, never leverage too much, especially on 2nd property onwards. Now i am more conservative, infact already consider 'kia si' i think .... Holding on to a negative equity for a decade is no joke even if there are tenants paying for your installments. :tsk-tsk:
Property is not value on a daily or even on a monthly basis, unlike shares, futures where it is valued daily and have to do margin top up,
Banks don't like to book a loss - as it will affect their CAR. So key point is to be punctual in your payment.
thks for your "unqualified opinion" in the most resourceful way!;)
may i know what is "First charge ahead of cpf'?
btw,my cpf OA will all b wipe out to use for housing
when you say bank r protected by 20-30% margin, does it mean if current TOP or exisiting condo u staying if drop to 30%in value,den chances r the bank might ask for top up in cash?
For HDB flat The CPF charge will take effect upon the release of CPF savings. The ranking of charge is shown in below:
1st Charge - Bank's or HDB’s Outstanding Loan
2nd Charge - CPF principal sum up to 100% of VL plus CPF used to pay the legal and stamp fees in the purchase, and cost of upgrading under the HDB Main Upgrading Programme.
3rd Charge - Equal ranking -CPF principal sum beyond 100% of VL plus CPF accrued interest -Repayment of outstanding balance of the housing loan interests
4th Charge - Equal ranking -CPF legal costs and expenses -Bank's legal costs and expenses
Private Property The CPF charge will take effect on the property when the CPF savings are released. For private residential properties bought or refinanced after 1 September 2003, the ranking of the charge is shown in the Table below:
1st Charge - Outstanding housing loan from your financier
2nd Charge - CPF principal sum up to 100% Valuation Limit plus CPF withdrawals used for the legal and stamp fees in the purchase
3rd Charge - Equal ranking (pari passu) -CPF principal sum beyond the 100% Valuation Limit plus accrued interest -Repayment of outstanding balance of the housing loan interests
4th Charge - Equal ranking (pari passu) -CPF legal costs and expenses -Financier's legal costs and expenses
------------------------------------------------
You can do more reading here http://mycpf.cpf.gov.sg/CPF/my-cpf/buy-house/BH6.htm . Cheers!
If the property value falls below the outstanding mortgage, you are holding a negative asset. By right, the bank can ask you to top up the difference.
Below is what I observed during the bad times in 1999, 2002 to 2004.
1) In Singapore, owners holding negative asset properties were not asked to pay the difference. The banks were afraid of handling so many troubled properties. They rather called up the owners to restructure the loans, especially if the owners did not pay the installments on time.
2) In Hong Kong, owners unable to pay the difference had their properties repossessed by the banks. The society gave this group of people the name "negative asset class". Everyday you read news about the negative asset class committing suicide (mostly jumping off buildings, burning charcoals or jumping off MTR platforms). It was so sad that the police said they would rather deal with real crimes ...
All these are too painful to forget. I tell myself that I will never chase prices or over-commit in any property investment.
kingkong1984
20-12-10, 22:32
Read this here
http://www.salary.sg/2008/margin-call-on-your-housing-loan/
Plus tricks to watch out for.
http://propertybuyer.com.sg/articles/dishonest-singapore-property-agent/option-to-purchase-dishonest-singapore-property-agents-can-still-play/
Case study 1 , Dishonest agent dupes buying into believing that the deal is sealed at $1.23m, this price is acceptable by the seller.
Found these
http://forums.condosingapore.com/showthread.php?t=7111
J-Dog (Death by top up?)
devilplate
21-12-10, 00:14
If the property value falls below the outstanding mortgage, you are holding a negative asset. By right, the bank can ask you to top up the difference.
Below is what I observed during the bad times in 1999, 2002 to 2004.
1) In Singapore, owners holding negative asset properties were not asked to pay the difference. The banks were afraid of handling so many troubled properties. They rather called up the owners to restructure the loans, especially if the owners did not pay the installments on time.
2) In Hong Kong, owners unable to pay the difference had their properties repossessed by the banks. The society gave this group of people the name "negative asset class". Everyday you read news about the negative asset class committing suicide (mostly jumping off buildings, burning charcoals or jumping off MTR platforms). It was so sad that the police said they would rather deal with real crimes ...
All these are too painful to forget. I tell myself that I will never chase prices or over-commit in any property investment.
u seems very old bird...
Squall8888
21-12-10, 08:28
Bought two units at villa marina in 1997. Stupid timing but the value drop 60% at one point of time. Two bedders at 1M+. Both 80% loan with a local bank. At its lowest point in 2003, it was 500k. Bank didn't ask for top up though amount is about 70% loan remaining. Both loans with same bank.
Reason for drop is simple. Yield was around 1% in 1997 when I buy. Didn't know why also, maybe you can say chasing market. I have learnt my lesson so I hope no one does the same. Look at the yield before you buy. If it is 1%, screw it. Rented out both for 10 years and just sold off recently.
Before 2003, CPF was first charge.
Topping-up of value was a risk management manouevre by the bank. There will be a bigger loss if the the property devalues further and the loaner defaults later. The more loans you have with the bank means the bank has a higher exposure to that loss.
This was done selectively and highly leveraged speculators were targetted rather than owner-occupiers. Many speculators nowadays prefer to loan with different banks for different properties in order to able to escape the radar of any individual bank.
Cheers
devilplate
21-12-10, 08:49
Bought two units at villa marina in 1997. Stupid timing but the value drop 60% at one point of time. Two bedders at 1M+. Both 80% loan with a local bank. At its lowest point in 2003, it was 500k. Bank didn't ask for top up though amount is about 70% loan remaining. Both loans with same bank.
Reason for drop is simple. Yield was around 1% in 1997 when I buy. Didn't know why also, maybe you can say chasing market. I have learnt my lesson so I hope no one does the same. Look at the yield before you buy. If it is 1%, screw it. Rented out both for 10 years and just sold off recently.
still underwater....
btw, doesnt seem possible for yield 1% ...let say 2k pm work out to be ard 2%?
or u mean the yield drop to 1% in 2003? i wud tink still can fetch 1.5k pm during tat period...:2cents:
Reason for drop is simple. Yield was around 1% in 1997 when I buy. Didn't know why also, maybe you can say chasing market. I have learnt my lesson so I hope no one does the same. Look at the yield before you buy. If it is 1%, screw it. Rented out both for 10 years and just sold off recently.
WOW! You really have mental fortitude :)
Anyway, what is the gross rental yield you typically look at before you think it's a good buy?
I am getting concern is the MM units to be completed in the near term. Majority of these were sold at above $1500 psf and above. In other words, a rental of $3,000 is needed especially the interest rate could be heading up.
Assessing the stack of one bedder of 500+ sq ft opposite my unit, about half are vacant and are not able to find tenant at $3000 per month, and this is one of the best projects in the east.
So I wonder, when all these MM units completed, how are they going to find tenants, service the loans, and perhaps, this might lead to a sell down of MM units.
devilplate
21-12-10, 09:18
I am getting concern is the MM units to be completed in the near term. Majority of these were sold at above $1500 psf and above. In other words, a rental of $3,000 is needed especially the interest rate could be heading up.
Assessing the stack of one bedder of 500+ sq ft opposite my unit, about half are vacant and are not able to find tenant at $3000 per month, and this is one of the best projects in the east.
So I wonder, when all these MM units completed, how are they going to find tenants, service the loans, and perhaps, this might lead to a sell down of MM units.
which project?
how come i find it easiest to find tenants for MM?
i personally more worried about the bigger units.....bigger loan....interest rate up 1% ...ouch:scared-3:
and den bigger units goto compete rental with the MMs....MM quantum low...can afford to rent out at 1.5-2k for those 4xx-5xxk MMs....but for bigger units how? tink about it
Bought two units at villa marina in 1997. Stupid timing but the value drop 60% at one point of time. Two bedders at 1M+. Both 80% loan with a local bank. At its lowest point in 2003, it was 500k. Bank didn't ask for top up though amount is about 70% loan remaining. Both loans with same bank.
Reason for drop is simple. Yield was around 1% in 1997 when I buy. Didn't know why also, maybe you can say chasing market. I have learnt my lesson so I hope no one does the same. Look at the yield before you buy. If it is 1%, screw it. Rented out both for 10 years and just sold off recently.
Looks like we attended the same lesson... very simliar scenario
mine property went down from launch price of 600k+ to lowest 370k.
Installment paid dilligently with tenants rental. Held for a decade before selling last year. So should anyone buy a property at the higest point, you would need to hold till the next peak.
Looks like we attended the same lesson... very simliar scenario
mine property went down from launch price of 600k+ to lowest 370k.
Installment paid dilligently with tenants rental. Held for a decade before selling last year. So should anyone buy a property at the higest point, you would need to hold till the next peak.
What to buy is the knowledge
when to buy / sell is the wisdom
Timing the market is the most difficult
Bought two units at villa marina in 1997. Stupid timing but the value drop 60% at one point of time. Two bedders at 1M+. Both 80% loan with a local bank. At its lowest point in 2003, it was 500k. Bank didn't ask for top up though amount is about 70% loan remaining. Both loans with same bank.
Reason for drop is simple. Yield was around 1% in 1997 when I buy. Didn't know why also, maybe you can say chasing market. I have learnt my lesson so I hope no one does the same. Look at the yield before you buy. If it is 1%, screw it. Rented out both for 10 years and just sold off recently.
Is it the old condo built by far east org at maple ave, near 6th ave?
It was indeed selling very cheaply in 2005-2007. Could get a three bedder for a lot less than $1m, maybe $600k to $700k. Think at that time if you had $1m you could have bought 2 units of three bedders.:D
Then again i heard rumours of sinks breaking off the wall and falling on residents feet, courtesy of Far East Orgnaization's quality.:D
Huh? Some wild bird here said the opposite, singing that FEO quality now very superb! Can they improve so fast? :confused:
Is it the old condo built by far east org at maple ave, near 6th ave?
It was indeed selling very cheaply in 2005-2007. Could get a three bedder for a lot less than $1m, maybe $600k to $700k. Think at that time if you had $1m you could have bought 2 units of three bedders.:D
Then again i heard rumours of sinks breaking off the wall and falling on residents feet, courtesy of Far East Orgnaization's quality.:D
devilplate
21-12-10, 14:12
Huh? Some wild bird here said the opposite, singing that FEO quality now very superb! Can they improve so fast? :confused:
FEO quality not bad wat...
Squall8888
21-12-10, 14:13
In 1997, rental is bad. In 1999, rental is ridiculously low. The place is along Jalan Sempadan. 2 bedroom first rented out at 1-1.2k. Only recently (really recently) in 2007, rental went up to 2.5k-3k and stay there. That place got no mrt. People say victoria JC got prospect but how many do not have own house there? But I would still say, it is a not so bad investment. More than 100% returns on capital in 12 years.
still underwater....
btw, doesnt seem possible for yield 1% ...let say 2k pm work out to be ard 2%?
or u mean the yield drop to 1% in 2003? i wud tink still can fetch 1.5k pm during tat period...:2cents:
In 1997, rental is bad. In 1999, rental is ridiculously low. The place is along Jalan Sempadan. 2 bedroom first rented out at 1-1.2k. Only recently (really recently) in 2007, rental went up to 2.5k-3k and stay there. That place got no mrt. People say victoria JC got prospect but how many do not have own house there? But I would still say, it is a not so bad investment. More than 100% returns on capital in 12 years.
wow, to be able to afford $1m x 2 units in 1997 is an achievement.
now $1m close 1 eye.
if 20% loan, you made about $400k profit on $400k capital after 12 years. 6% per annum compounded.
devilplate
21-12-10, 14:33
In 1997, rental is bad. In 1999, rental is ridiculously low. The place is along Jalan Sempadan. 2 bedroom first rented out at 1-1.2k. Only recently (really recently) in 2007, rental went up to 2.5k-3k and stay there. That place got no mrt. People say victoria JC got prospect but how many do not have own house there? But I would still say, it is a not so bad investment. More than 100% returns on capital in 12 years.
u sold at a profit?
i tot still below ur purchase price based on current valuation?
key point is "HOLDING POWER n DO NOT OVER LEVERAGE" devilplate strategy is correct. always go for 50%-60% loan and keep cash for emergency use. firesale happen only when people panick!!! remember Property_Owner said his heart became so weak on his 40++ properties during global crisis. but he has the holding power :D
key point is "HOLDING POWER n DO NOT OVER LEVERAGE" devilplate strategy is correct. always go for 50%-60% loan and keep cash for emergency use. firesale happen only when people panick!!! remember Property_Owner said his heart became so weak on his 40++ properties during global crisis. but he has the holding power :D
even devilplate mention 50-60% loan to another forummer, the wealth accumulation is slow
Chillyred888
21-12-10, 16:06
in anticipation to what Garment's next move to cool prop prices within next few months...
as a 1st time buyer(for own stay) if i buy in now,am i wasting my chance? as the latest measure is targeted at prop speculators.
Or i should just wait to c if prices should edge down aft the next measure?
in anticipation to what Garment's next move to cool prop prices within next few months...
as a 1st time buyer(for own stay) if i buy in now,am i wasting my chance? as the latest measure is targeted at prop speculators.
Or i should just wait to c if prices should edge down aft the next measure?
doubt govt will introduce anything for the next half year. they need time to ascertain the effect. MBT said the measure work but does it really effective? HDB COV drop but valuation UP. new launch continue to launch at new high and ppl continue to buy (even sembawang going to launch at 850~950psf) so even with new measure the price might not drop. but if new measure they lower the LTV again, it will really affect new buyers. so maybe if there is a good buy now better do it:2cents:
doubt govt will introduce anything for the next half year. they need time to ascertain the effect. MBT said the measure work but does it really effective? HDB COV drop but valuation UP. new launch continue to launch at new high and ppl continue to buy (even sembawang going to launch at 850~950psf) so even with new measure the price might not drop. but if new measure they lower the LTV again, it will really affect new buyers. so maybe if there is a good buy now better do it:2cents:
everybody think like that. sure price go up...better buy before there is round 4.
And after government introduced additional measures in round 4, people will still buy thinking round 5 is coming :)
everybody think like that. sure price go up...better buy before there is round 4.
And after government introduced additional measures in round 4, people will still buy thinking round 5 is coming :)
problem is developer is not reducing the price. govt should do something to developer next round......
devilplate
21-12-10, 17:12
even devilplate mention 50-60% loan to another forummer, the wealth accumulation is slow
i tot u have multiple properties?
banks very unlikely will lend u ltv 80% for many ppty.....so ended up also 60%....gd times they lend 70% for multiple ppty owners
devilplate
21-12-10, 17:13
in anticipation to what Garment's next move to cool prop prices within next few months...
as a 1st time buyer(for own stay) if i buy in now,am i wasting my chance? as the latest measure is targeted at prop speculators.
Or i should just wait to c if prices should edge down aft the next measure?
i suggest u buy a HDB first:D
bargain hunter
21-12-10, 19:41
there is a slight possibility for cooling measures in feb after CNY and around budget time if home sales are very strong in Dec 2010 and Jan 2011.
in anticipation to what Garment's next move to cool prop prices within next few months...
as a 1st time buyer(for own stay) if i buy in now,am i wasting my chance? as the latest measure is targeted at prop speculators.
Or i should just wait to c if prices should edge down aft the next measure?
there is a slight possibility for cooling measures in feb after CNY and around budget time if home sales are very strong in Dec 2010 and Jan 2011.
gap is about 6 months between measures.
in anticipation to what Garment's next move to cool prop prices within next few months...
as a 1st time buyer(for own stay) if i buy in now,am i wasting my chance? as the latest measure is targeted at prop speculators.
Or i should just wait to c if prices should edge down aft the next measure?
let me give you some useless advice.
Buy before the boat goes higher.
doesn't matter if OCR or CCR.
What makes you think prices will edge down after Round 4?
Don't be like the people who thinks Round 1, Round 2 and Round 3, prices will go down. See what happen, after each round of measures, prices still go higher. Economy still growing or not? If still growing, prices go up.
HDB COV down, valuation up, total price remain the same. It is good. No need so much cash anymore. Bank will lend you more.
If the property value falls below the outstanding mortgage, you are holding a negative asset. By right, the bank can ask you to top up the difference.
Below is what I observed during the bad times in 1999, 2002 to 2004.
1) In Singapore, owners holding negative asset properties were not asked to pay the difference. The banks were afraid of handling so many troubled properties. They rather called up the owners to restructure the loans, especially if the owners did not pay the installments on time.
2) In Hong Kong, owners unable to pay the difference had their properties repossessed by the banks. The society gave this group of people the name "negative asset class". Everyday you read news about the negative asset class committing suicide (mostly jumping off buildings, burning charcoals or jumping off MTR platforms). It was so sad that the police said they would rather deal with real crimes ...
All these are too painful to forget. I tell myself that I will never chase prices or over-commit in any property investment.
My brother bought some property in HK in 1997, and the price dropped more than 60%. He was paying installment regually, but the bank still asked him to top up. Luckly he had enough cash to do that.
In the next round of property drop in Singapore, there is no gurantee that banks (in particular foriegn banks) will not ask you to top up when negtive equity happens. If the banks don't see hope that the price will bounce back to positive equity, they will ask you to top up. Otherwise the banks will be holding negetive assets.
This also explains HK now is only granting much lower Loan percentage for 2nd property. Singapore will need to learn. If there is a massive capital outflow (and people outflow), even HDB can be over priced. Prepare for the unthinkable.
Let's hope it will never happen.
Thanks,
Richard
devilplate
24-12-10, 00:54
My brother bought some property in HK in 1997, and the price dropped more than 60%. He was paying installment regually, but the bank still asked him to top up. Luckly he had enough cash to do that.
In the next round of property drop in Singapore, there is no gurantee that banks (in particular foriegn banks) will not ask you to top up when negtive equity happens. If the banks don't see hope that the price will bounce back to positive equity, they will ask you to top up. Otherwise the banks will be holding negetive assets.
This also explains HK now is only granting much lower Loan percentage for 2nd property. Singapore will need to learn. If there is a massive capital outflow (and people outflow), even HDB can be over priced. Prepare for the unthinkable.
Let's hope it will never happen.
Thanks,
Richard
actually top up meaning reducing the loan quantum rite?
so take only 40% loan lor....worse case ppty price drop 60%....dun have to top up? hehe
u see spain....was reported ghost towns....:hell-hath-no-fury:
Chillyred888
24-12-10, 09:16
My brother bought some property in HK in 1997, and the price dropped more than 60%. He was paying installment regually, but the bank still asked him to top up. Luckly he had enough cash to do that.
In the next round of property drop in Singapore, there is no gurantee that banks (in particular foriegn banks) will not ask you to top up when negtive equity happens. If the banks don't see hope that the price will bounce back to positive equity, they will ask you to top up. Otherwise the banks will be holding negetive assets.
This also explains HK now is only granting much lower Loan percentage for 2nd property. Singapore will need to learn. If there is a massive capital outflow (and people outflow), even HDB can be over priced. Prepare for the unthinkable.
Let's hope it will never happen.
Thanks,
Richard
you mentioned your brother bought "some properties",bank ask for top up due to his high leverage?
My brother started to work in Singapore in 1993, bought a 5-room HDB here. He then moved to HK in 1996 due to a good position offered by the branch of his company. With limited savings, he was almost making 80% loan (at high interest rate by today's standard). After HK property crash, the Bank asked him to top up. He was shocked because he was paying monthly installment and didn't know the bank could ask him to top up. He couldn't sell his Singapore HDB because the period he rented out cannot count into the minimum stay period. It was a hard time for him.
What I want to highlight is don't assume that banks in Singapore will not ask you to top up in the next round of property crash.
Thanks,
Richard
Your bro couldn't qualify for the use HDB loan? :beats-me-man:
My brother started to work in Singapore in 1993, bought a 5-room HDB here. He then moved to HK in 1996 due to a good position offered by the branch of his company. With limited savings, he was almost making 80% loan (at high interest rate by today's standard). After HK property crash, the Bank asked him to top up. He was shocked because he was paying monthly installment and didn't know the bank could ask him to top up. He couldn't sell his Singapore HDB because the period he rented out cannot count into the minimum stay period. It was a hard time for him.
What I want to highlight is don't assume that banks in Singapore will not ask you to top up in the next round of property crash.
Thanks,
Richard
Powered by vBulletin® Version 4.2.2 Copyright © 2024 vBulletin Solutions, Inc. All rights reserved.