View Full Version : CM6: Hypothetical Cases
From sbr
Here are hypothetical cases to illustrate impact of new property measures
What happens if a 30-yr old first time buyer buys a S$1mn condo?
According to Nomura, unless home buyers have ample capital, mortgage repayment could now be 24-45% higher and thus less attractive for existing home owners to refinance.
Case 1: 30-yr old first time home buyer buys a S$1mn condo
Before 6 Oct 2012:
Max LTV = 80%, assuming a 40- yr mortgage at a rate of 1.5%pa, equity = S$200k, monthly
mortgage repayment c. S$2,220
With effect from 6 Oct 2012:
Scenario 1: max mortgage tenure of 35-yr at a rate 1.5%pa but LTV capped at 60%, equity = S$400k, monthly mortgage repayment c. S$1,840.
Scenario 2: takes a 30-yr mortgage at a rate of 1.5%pa and LTV of 80%, equity = S$200k, monthly mortgage
repayment c. S$2,760
Remarks:
Unless the first time home buyer has an additional capital of S$200k, the monthly mortgage repayment w ill now be c. 24% more than previously.
Case 2: Existing home owner who bought his unit 3 yrs ago for S$1mn at LTV of 80% looking to refinance. Assuming existing mortgage is 40-yr at rate of 1.75%pa, monthly repayment c. S$2,320
Before 6 Oct 2012:
Refinance w ith 40-yr mortgage at a rate of 1.5%pa, monthly mortgage repayment c. S$2,100.
With effect from 6 Oct 2012:
Max tenure allow ed = 32 yrs, assuming rate of 1.5%pa, monthly mortgage repayment c. S$2,500
Remarks:
Does not make sense to refinance even though market rate is low er than that of the existing loan.
Case 3: 40-yr old Singapore citizen with an existing mortgage buys a 2nd condo at S$1mn for investment.
Before 6 Oct 2012:
Max LTV = 60%, assuming a 40- yr mortgage at a rate of 1.5%pa, equity = S$400k, monthly mortgage repayment c. S$1,660
With effect from 6 Oct 2012:
Scenario 1: max mortgage tenure of 35-yr at a rate of 1.5%pa but LTV capped at 40%, equity = S$600k, monthly mortgage repayment c. S$1,220
Scenario 2: takes a 25-yr mortgage at a rate of 1.5%pa and LTV of 60%, equity = S$400k, monthly mortgage repayment c. S$2,400
Remarks:
Unless the buyer has on hand capital of S$600k, the monthly mortgage repayment is now c. 45% higher than before. Note that for PRs buying a second residential property, ABSD of 3% w ill also apply.
Case 4: A company buys a S$1mn condo for investment.
Before 6 Oct 2012:
ABSD of 10% applies and max LTV = 50%. Minimum holding period of 4 yrs to avoid SSD. Assuming 40-yr mortgage, 3.5% rental yield and 20% capital appreciation upon disposal at end of 4 yrs, IRR = 7%.
With effect from 6 Oct 2012:
Max LTV = 40% and max. mortgage tenure = 35-yr. All other conditions apply = lower IRR of 6.3%
Case 5: A developer buys a condo plot with GFA = 0.4mn sq ft at S$750psfppr. The project is launched and fully sold 1 yr later at S$1,300psf. The project takes 4 yrs to complete.
Before 6 Oct 2012:
Max LTV = 50%. Assuming cost of borrow ing = 2%, IRR = 7.5%.
With effect from 6 Oct 2012:
Max. LTV = 40%. Assuming cost of borrow ing = 2%, IRR 6.3%.
Remarks:
This calculation assumes that the project is fully sold and completed within 5 yrs. Otherwise, the ABSD of 10% applies.
Another impact, HDB queue will be longer. BTO price will be going up and up, now that HDB provide a better financing and affordability in comparison to PC.
Another impact, HDB queue will be longer. BTO price will be going up and up, now that HDB provide a better financing and affordability in comparison to PC.
This is what our gov wish to see!! :D
Another impact, HDB queue will be longer. BTO price will be going up and up, now that HDB provide a better financing and affordability in comparison to PC.
Sign... It seems that HDB is not so affordable now as compared to last time. The theory is if you can't afford, stay in suburban area, leave the town area for the rich people. Even for some of the resale flats, the resale prices can be comparable with pte ppty. So what's the difference between the public and private housing?
Sign... It seems that HDB is not so affordable now as compared to last time. The theory is if you can't afford, stay in suburban area, leave the town area for the rich people. Even for some of the resale flats, the resale prices can be comparable with pte ppty. So what's the difference between the public and private housing?
Not much different.... Its only tiiming different. Gov let the private housing to go sky high first, before they sell public housing at sky high price. Otherwise how to justify expensive HDB?
Secretariat
20-10-12, 10:20
From sbr
Here are hypothetical cases to illustrate impact of new property measures
What happens if a 30-yr old first time buyer buys a S$1mn condo?
According to Nomura, unless home buyers have ample capital, mortgage repayment could now be 24-45% higher and thus less attractive for existing home owners to refinance.
Case 1: 30-yr old first time home buyer buys a S$1mn condo
Before 6 Oct 2012:
Max LTV = 80%, assuming a 40- yr mortgage at a rate of 1.5%pa, equity = S$200k, monthly
mortgage repayment c. S$2,220
With effect from 6 Oct 2012:
Scenario 1: max mortgage tenure of 35-yr at a rate 1.5%pa but LTV capped at 60%, equity = S$400k, monthly mortgage repayment c. S$1,840.
Scenario 2: takes a 30-yr mortgage at a rate of 1.5%pa and LTV of 80%, equity = S$200k, monthly mortgage
repayment c. S$2,760
Remarks:
Unless the first time home buyer has an additional capital of S$200k, the monthly mortgage repayment w ill now be c. 24% more than previously.
.
Either
- This Nomura analyst is an i* who thinks that a buyer of this profile borrowed more than 30 years,
Or
- The buyer is indeed an i*
Oops...moderator don't flame me ah..:D
Another impact, HDB queue will be longer. BTO price will be going up and up, now that HDB provide a better financing and affordability in comparison to PC.
Is BTO prices going up??? I thought KBW promised in BLACK and WHITE that BTO prices will not track market price anymore but rather peg to construction costs.
how come people never read newspaper?
Is BTO prices going up??? I thought KBW promised in BLACK and WHITE that BTO prices will not track market price anymore but rather peg to construction costs.
how come people never read newspaper?
400k for a 4 room flat? What kind of construction cost is that?
Is BTO prices going up??? I thought KBW promised in BLACK and WHITE that BTO prices will not track market price anymore but rather peg to construction costs.
how come people never read newspaper?
Actually, it is all up to the individual to say. The seller can also say that I buy/pay high, so I must sell high. One good example is a few months back, I went to a hawker centre to buy a piece of fruit, the fruit seller told me that the prices of the fruits had gone up as his vendor had charged him higher, so instead of the normal 50cts, he charged me 60cts. But till now, other stalls in the same hawker centre are still selling at 50cts. Though this is a small amount, so not much people bother about it but what happens if it involves a big sum of money. So I wonder is the inflation cause by "man-made inflation".
I always heard people say "only businessman can make money":D .
Actually, it is all up to the individual to say. The seller can also say that I buy/pay high, so I must sell high. One good example is a few months back, I went to a hawker centre to buy a piece of fruit, the fruit seller told me that the prices of the fruits had gone up as his vendor had charged him higher, so instead of the normal 50cts, he charged me 60cts. But till now, other stalls in the same hawker centre are still selling at 50cts. Though this is a small amount, so not much people bother about it but what happens if it involves a big sum of money. So I wonder is the inflation cause by "man-made inflation".
I always heard people say "only businessman can make money":D .
Thanks for sharing your story sis.
The moral of your story is not that prices have gone up, but that buyers (like you) are still willing to pay for it. Especially when you know that other stalls are still selling at 50c.
Just when u think that u are ahead financially.... Then come the inflation, increase taxes, new laws preventing capital gains, the rest of our friends catching up..... These things seem never end.
Thanks for sharing your story sis.
The moral of your story is not that prices have gone up, but that buyers (like you) are still willing to pay for it. Especially when you know that other stalls are still selling at 50c.
No lah, I realise it only after a few days when I went to another stall to buy. So now I don't patronize this stall anymore.:D
No lah, I realise it only after a few days when I went to another stall to buy. So now I don't patronize this stall anymore.:D
Too bad we only have 1 seller for hdb.
HDB valuation SGD 595,000 for 5 Room, rented out 2 years ago for SGD 2400.
1. What is fair market value of the HDB?
2. Rental increase to SGD 2800, what is the new value?
HDB valuation SGD 595,000 for 5 Room, rented out 2 years ago for SGD 2400.
1. What is fair market value of the HDB?
2. Rental increase to SGD 2800, what is the new value?
Yes. Interestingly, when rental is E stamped, their valuation follows the rental. Rents at HDB still holding very well. My relative 5 bedroom lease extended another year to 2014.
Allthepies
20-10-12, 13:39
Want cheap HDB, stop HDB renting. Full stop. U cant have it both way. Cheap HDB price yet you can milk it by renting high.
Or impose a levy on people who rent out HDB. Don't waste tax payer money to subsidize people who want to profit from HDB :D :D
Want cheap HDB, stop HDB renting. Full stop. U cant have it both way. Cheap HDB price yet you can milk it by renting high.
Or impose a levy on people who rent out HDB. Don't waste tax payer money to subsidize people who want to profit from HDB :D :D
*Like
*Agree
Seriously HDB should not be for rental and government should impose a tax on HDB rental. Eg. Owner need to apply for a license to rental out. The cost of the license will be say 30% of the rental collected. The objective is : It is the PEOPLE of Singapore who should benefit from HDB rental and not the individual. Why should we subsidize HDB flats for people to rental out and make money ?
Another point regarding the impact of CM6 - there is a VERY BIG assumption that people cannot afford a shorter loan tenure. This is absolutely wrong. If you have purchased a property before you will know that it makes PERFECT sense to loan to the max at the initial period. Even if you can afford a shorter tenure, loan to the max.
This is the Principle of Bank Loans : Easy to repay, hard to loan extra.
DKSG
Hdb owner will have declared rental income once it is e-stamp as there is a record in iras.
Yes. Interestingly, when rental is E stamped, their valuation follows the rental. Rents at HDB still holding very well. My relative 5 bedroom lease extended another year to 2014.
CM7
HDB owner buy private, 10% ABSD
HDB owner buy private, to dispose of HDB within 6mo
HDB owner currently renting out whole flat, not allowed to buy private
All COV subject to tax as income
Do you mean income (including COV) from sale of hdb is not taxable? Got to declare.
CM7
HDB owner buy private, 10% ABSD
HDB owner buy private, to dispose of HDB within 6mo
HDB owner currently renting out whole flat, not allowed to buy private
All COV subject to tax as income
CM7
HDB owner buy private, 10% ABSD
HDB owner buy private, to dispose of HDB within 6mo
HDB owner currently renting out whole flat, not allowed to buy private
All COV subject to tax as income
*Very Like
With item 2, no need item 1 la. Give them a chance to upgrade!
They should mandate those owning HDB and private to dispose of either 1 within 9 months from TODAY! Else, property tax for the PC will be 50% of AV.
I seriously cannot understand government stand on those who own HDB + private. Does government really intend to subsidize them ?
Office Boy never get subsidy, so red eyed! hahahaa!
DKSG
since when capital gain need to declare?
Do not mean capital gain tax. There is box in income tax declaration called "other income"?
since when capital gain need to declare?
oh you mean the box where we declare our 4D and TOTO winnings...
Becos some PMETs do provide consultancy services which can be equal or more than their active monthly income. This is where they can declare becos sale of property is made known to Iraq right?
Allthepies
20-10-12, 16:00
Capital gain from property sale is non taxable for most situations.
Good to know:scared-3:
Capital gain from property sale is non taxable for most situations.
Good to know:scared-3:
Bro, it is taxable when it is deem by IRAS as trade/biz. So for example, you Love watches. You go to the Internet and do a lot of buying and selling. Then, it is considered you trade in watches and not a hobby. So frequency of trade is important. So no need to :scared-3: Ok?
I simplify for you.
What if I sell all at one go or one after another? Should be alright?
Bro, it is taxable when it is deem by IRAS as trade/biz. So for example, you Love watches. You go to the Internet and do a lot of buying and selling. Then, it is considered you trade in watches and not a hobby. So frequency of trade is important. So no need to :scared-3: Ok?
I simplify for you.
What if I sell all at one go or one after another? Should be alright?
It depends on how long you hold and if they view you to be trading. Typically, they will speak with you and tell u you are trading(if they view it to be).
If you held it for say 6 years and decide to let go all, typically, because you held it for 6 yrs and rented out, they deemed it as investment and most likely will not tax. The trick is they did not clearly define trading and they did define frequency of trade. So the definition is up to them.
But I should be overly worriedif I had held for awhile.
Typically, if you have it as an occupation/"second" job, then tax kicks in. But how to have it as a job if u sell it after say 3 years. You will go hungry by then. Hahahaha.
With the new SSD, it is difficult to get taxed if you hold the property for 4 years.
But then, if you buy 1-2 property each year and sell them when they are 4 years old on a recurring basis, you willbe taxed.
Can ask Office Boy, I know a little bit about taxes. Haha!
DKSG
buttercarp
20-10-12, 19:09
With the new SSD, it is difficult to get taxed if you hold the property for 4 years.
But then, if you buy 1-2 property each year and sell them when they are 4 years old on a recurring basis, you willbe taxed.
Can ask Office Boy, I know a little bit about taxes. Haha!
DKSG
Wah, office boy work in tax department?
How they tax when you sell property on recurring basis?
If for example you are a salaried worker, will they just add it to your earned income?
Wah, office boy work in tax department?
How they tax when you sell property on recurring basis?
If for example you are a salaried worker, will they just add it to your earned income?
If u don't report, they compound the tax damn siong. Don't play play. Check iras for evasion of tax.
One point to note is some would now be at the mercy of the bank whom no longer need to work hard to retain existing customer.....those above a certain age may not be able to negotiate for a better refinancing package nor run to another bank...banks do not need to dangle attractive packages to the segment where borrowers are affected by the restriction.
Thanks. Got to be more careful.
It depends on how long you hold and if they view you to be trading. Typically, they will speak with you and tell u you are trading(if they view it to be).
If you held it for say 6 years and decide to let go all, typically, because you held it for 6 yrs and rented out, they deemed it as investment and most likely will not tax. The trick is they did not clearly define trading and they did define frequency of trade. So the definition is up to them.
But I should be overly worriedif I had held for awhile.
Typically, if you have it as an occupation/"second" job, then tax kicks in. But how to have it as a job if u sell it after say 3 years. You will go hungry by then. Hahahaha.
Thanks. Got to be more careful.
Bro, sorry, so many typo error. Shouldn't became should, etcc.... But I think u got the gist of it.
I spoke w my lawyer on this as well, and they also find it diff to define.
Wah, office boy work in tax department?
How they tax when you sell property on recurring basis?
If for example you are a salaried worker, will they just add it to your earned income?
Office Boy not work in tax dept la...
Just learn from other more qualified people in the office lor ...
When they tax u, they add the profit to your salary. The same way as they add your net rental income to your salary.
But BC is a professional tai tai, so got salary to add meh ?
DKSG
phantom_opera
21-10-12, 10:16
Property in sg, hk and Beijing shanghai now become best value store, all these CMs simply ensure only rich can do it
Property in sg, hk and Beijing shanghai now become best value store, all these CMs simply ensure only rich can do it
HK new high again this week
phantom_opera
21-10-12, 10:35
Yes, NT again up like 2pc weekly, malaysia ulu land with palm can be up 10x in last 10y
I have a neutral opinion here...why stop renting will make HDB cheap?? Is there a strong correlation? HDB will alway be priced by HDB and they will give u many many reasons u and me are familiar with. Today we have more than 1 mil flats and each year, rental units approval only merely about 26k +-. Not to mention some are renewal.
If FT keep coming at a rate of 25k each yr for eg, u think all of them are rich enough to stay in condo?? Then if they cannot afford, where are they going to stay? Then garmen will hv another headache when to house this ppl...so why not let market settle themselves...
Always remember that if we have cheap HDB, then the condo and landed price today will crash, I thought most of u here will know this, so, don't get eye sore when ppl rent out their hdb, no hard feeling....kidding :o most ppl choose to profit from the capital gain, and some choose to rent out, nothing wrong.
This is already part of the equation and if u try to change any of the variable, the stability will be rocked and then another problem will arise.
Want cheap HDB, stop HDB renting. Full stop. U cant have it both way. Cheap HDB price yet you can milk it by renting high.
Or impose a levy on people who rent out HDB. Don't waste tax payer money to subsidize people who want to profit from HDB :D :D
Yes, NT again up like 2pc weekly, malaysia ulu land with palm can be up 10x in last 10y
This is the power of INFLATION.
With the $4B crashing on the rest of the world every month, you can expect to see MORE in the coming quarters.
It will be interesting to see where are some of these $4B going to.
I am sure Sg is one of the favorite destination.
Just imagine if bank gives you a loan at $100mil loan 0.1% interest for the next 3 years, what will you do ?
DKSG
This is the power of INFLATION.
With the $4B crashing on the rest of the world every month, you can expect to see MORE in the coming quarters.
It will be interesting to see where are some of these $4B going to.
I am sure Sg is one of the favorite destination.
Just imagine if bank gives you a loan at $100mil loan 0.1% interest for the next 3 years, what will you do ?
DKSG
aiyoyo, it is US$40B and not 4B
should also add in from ECB, Japan.....
phantom_opera
21-10-12, 10:45
Aiyoyo it is 85b usd, 40b MBS 45b bonds
phantom_opera
21-10-12, 10:48
Central banks has a new name ie fiat money value destroyer, us debt up 120b per month just print 85b to dilute the debt
Central banks has a new name ie fiat money value destroyer, us debt up 120b per month just print 85b to dilute the debt
THE Phantom is indeed an expert.
A Office Boy is amatuer.
But this means we going to get inflation left right centre up down ?
DKSG
Aiyoyo it is 85b usd, 40b MBS 45b bonds
where did u get this 45B bonds?
is this for the new bonds issued or to pay off the existing bond?
BTW, how did they pay interest on the bonds?
pl enlighten
phantom_opera
21-10-12, 10:58
where did u get this 45B bonds?
is this for the new bonds issued or to pay off the existing bond?
BTW, how did they pay interest on the bonds?
pl enlighten
Continue the Op twist 45b per month qe2 has not stopped
They print and simply buy bonds and MBS from wall street to feed wall street with fiat money from thin air but wall street may not necessary leak all money out
Continue the Op twist 45b per month qe2 has not stopped
They print and simply buy bonds and MBS from wall street to feed wall street with fiat money from thin air but wall street may not necessary leak all money out
I tot QE2 alr ended
now it is the TIPS going on only
Secretariat
21-10-12, 11:59
I tot QE2 alr ended
now it is the TIPS going on only
Both also ended.
Now it is the open-ended QE3.
Want cheap HDB, stop HDB renting. Full stop. U cant have it both way. Cheap HDB price yet you can milk it by renting high.
Or impose a levy on people who rent out HDB. Don't waste tax payer money to subsidize people who want to profit from HDB :D :D
If only life is so simple.
Every HDB rent out is money to the gov in term of PTX, income Tax and stamp duty. Everything you do in Singapore, you pay tax. Nothing is free in Singapore, the air you breath is also not free.
Yes. Interestingly, when rental is E stamped, their valuation follows the rental. Rents at HDB still holding very well. My relative 5 bedroom lease extended another year to 2014.
That is one of the reason why HDB resale price is going up. In the old days, tenants normally don't stamp their rental agreement. Now all rental agreement need to stamp.
HDB valuation SGD 595,000 for 5 Room, rented out 2 years ago for SGD 2400.
1. What is fair market value of the 5 room HDB?
2. Rental increase to SGD 2800, what is the new value?
Anyone got the answer for the above question.
Hdb rental is more related to PC rental market. I don't think there is much correlation with the valuation of the hdb. When the valuer valued the hdb, rental is not part of their consideration. Hdb type, location, hdb resale price are part of their equation I think.
So, the fair value of the 5rm flat would depend on location, current resale market more than the rental price.
Next, demand and supply of rental flat, plus the price gap between the PC rental and HDB rental would also play a impt part.
Just my opinion. :2cents: :p
HDB valuation SGD 595,000 for 5 Room, rented out 2 years ago for SGD 2400.
1. What is fair market value of the 5 room HDB?
2. Rental increase to SGD 2800, what is the new value?
Anyone got the answer for the above question.
phantom_opera
21-10-12, 14:15
I tot QE2 alr ended
now it is the TIPS going on only
whatever u call it, just search in Internet u will get the 85b number, 40b mortgage backed securities and 45b us treasuries
Qe3 is not exactly open ended as there is a limit to MBS, so after a while us central bank will hold almost all MBS
It is a gamble
whatever u call it, just search in Internet u will get the 85b number, 40b mortgage backed securities and 45b us treasuries
Qe3 is not exactly open ended as there is a limit to MBS, so after a while us central bank will hold almost all MBS
It is a gamble
google and google
cannot find
instead found this
PBoC injects US$41.14b into money markets
http://forums.condosingapore.com/newreply.php?do=newreply&p=321637
phantom_opera
21-10-12, 14:55
google and google
cannot find
instead found this
PBoC injects US$41.14b into money markets
http://forums.condosingapore.com/newreply.php?do=newreply&p=321637
Google us continues operation twist
phantom_opera
21-10-12, 15:16
http://www.nasdaq.com/article/feds-balance-sheet-grows-in-latest-week-20121018-01398#.UIOewydhjTo
phantom_opera
21-10-12, 15:18
http://www.nasdaq.com/article/feds-balance-sheet-grows-in-latest-week-20121018-01398#.UIOewydhjTo
Us balance sheet up 36b in one week
http://www.nasdaq.com/article/feds-balance-sheet-grows-in-latest-week-20121018-01398#.UIOewydhjTo
Us balance sheet up 36b in one week
Able to see from some statistics where these funds are flowing to ?
How much did it come to Sg ?
Actually, just $1B come over EVERY MONTH, we will feel it already ...
$1B a month can buy how many properties here ?
DKSG
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