View Full Version : One Reason Why Recent Adjustments to Cooling Measures are Bad Signs for SG Buyers
Many analysts are calling the adjustments to cooling measures mild, and that they will not result in major changes in the property market.
Here's a counter-analysis.
Before we begin, you should note that every analyst has a private agenda, myself included. Whether that agenda is selfish or noble is a separate discussion. Some analysts want to buy cheap or buy more, some want to push for transactional numbers but do not care whether prices go up or down, some wants to sell high (nobody I know really), and some just love flowery language. But with that disclaimer out of the way, here goes my thoughts.
One of the blind spots analysts have so far failed to consider is the impact of the various loosening measures on foreign buyers.
http://www.propertyguru.com.sg/property-management-news/2016/11/141872/more-foreigners-buying-homes-in-singapore
The 2016 foreign buyers segment should total about 1,000 and is set to rise more in 2017.
With the marginal actions taken to signal the base price level for which SG Govt is comfortable with, the signal sent out externally is that foreign buyers and current foreign owners will be well buffered from further steep falls in whichever segment they are in, and the results are most notable in the gain in prices for resales for CCR segment, a segment which many foreign buyers tend to prefer. And RCR / OCR will also follow wherever CCR goes, no doubt about that.
The main revisions were to TDSR (twice) and SSD (once). The TDSR revisions not only exempted all owners from TDSR at refinancing, they also allowed all owners to engage in mortgage equity loans if required. Not only did this have an impact on the supply of resales properties (repossession and forced sales by banks), it also provided reassurance to existing and new (foreign included) buyers that proof of income is not required at refinancing. Together with the shortening of SSD-imposing period, the ecosystem is now much more friendly for a foreign affluent buyer (maybe with the full sum to pay up already) buying to stay or to invest.
The 2013-2017 window has served as a clear timeframe reserving private properties for upper-middle class Singaporeans who felt they were priced out in the run up of property from 2009 to 2013. All the CMs set up in the period served primarily to deter foreigners.
What is the base level of "foreigner" purchase?
"The number of ABSD transactions by foreigners was 1,149 last year (2014), down from 1,980 in 2013 and 2,432 in 2012, according to the Inland Revenue Authority of Singapore."
How high can foreign participation go?
"The proportion of purchases made by foreigners in Q2 2011 was similar to the 16% recorded in Q1 2011. In absolute terms, foreign purchases were 1,327 in Q2 2011, below the record high of 1,741 foreign purchases in Q2 2007. With the exception of one landed home in Sentosa Cove, the rest of the transactions by foreigners were for non-landed homes.
Among non-Singaporean buyers which comprise foreigners and Permanent Residents, mainland Chinese buyers were the top non-Singaporean purchasers of residential properties in Singapore for the second consecutive quarter. They made up 26% of purchases by non-Singaporeans in Q2 2011, buying 640 units, which is a new high and more than the 527 units purchased in Q1 2011."
According to our bargain thread on CCR properties, some CCR properties had been down by 30% or so by 2016. The ABSD served on foreigners' first and subsequent purchase (15%) now seemed relatively small in relation to the price drops. Moreover, there are some countries that are exempt from ABSD - although their home country property prices are nowhere near SG prices, there will be some that will commit having understood Asian mentalities about properties.
At the same time, we did see huge run up in property prices everywhere else in the world - HK, major cities in China, Australia etc etc (some few hundred %), at a time our prices fell by 11.2% overall.
With the recent tweaks in the CMs, the clear signal is that enough has been done to pull back prices and allowing qualified Singaporeans to purchase properties (some with ABSD). The groups that we will be welcoming back are the foreign buyers that qualify (some having to pay taxes to support our revenue starved Government).
And yes, interest rates are going up (for US and SG). But most of these foreigners are used to seeing interest rates of 5-12% in their home country.
I used to see 5-6% interest rate.. till now, i dont see the big noise about Fed rate.
Bro Bargain Hunter, this is my original article leh.
bargain hunter
18-03-17, 10:02
Bro Bargain Hunter, this is my original article leh.
sorry, the volume on the forum was so low, so i no longer login regularly. that's why i needed your latest post for me to pick it up. :)
The TDSR revisions not only exempted all owners from TDSR at refinancing, they also allowed all owners to engage in mortgage equity loans if required.
This one more interesting, how many are there in this "mortgage equity loans".
I am one of them in 2011 before ABSD. bought my first private in 2006.
So the owner of the property before 2006 will be in this game.
Wonder how many of such player.
bargain hunter
18-03-17, 19:08
The TDSR revisions not only exempted all owners from TDSR at refinancing, they also allowed all owners to engage in mortgage equity loans if required.
This one more interesting, how many are there in this "mortgage equity loans".
I am one of them in 2011 before ABSD. bought my first private in 2006.
So the owner of the property before 2006 will be in this game.
Wonder how many of such player.
haha, u were just complaining last year that u fail TDSR left right centre. now u r back in this game as a potential buyer.
i think there are many old rich in this category. darn it, they withdrew all their SELL CCR adverts after the ruling!
even for those conservative purchasers (of 2006 and before) who are now retired, they suddenly find themselves in a position to purchase should opportunities arise. Doesn't mean they will rush in but it is a supporting force should prices weaken further.
haha, u were just complaining last year that u fail TDSR left right centre. now u r back in this game as a potential buyer.
i think there are many old rich in this category. darn it, they withdrew all their SELL CCR adverts after the ruling!
even for those conservative purchasers (of 2006 and before) who are now retired, they suddenly find themselves in a position to purchase should opportunities arise. Doesn't mean they will rush in but it is a supporting force should prices weaken further.
Agree, they will not rush in but how many 10 years do they have.
Visit the nursing Home and Mandai will change ones look at life.
https://fb-s-d-a.akamaihd.net/h-ak-xap1/v/t1.0-0/p206x206/17264766_10210025724932607_6082543151934735575_n.jpg?oh=f7ec71b2bb48aa76aa045d2c12c1b360&oe=595B5225&__gda__=1495920451_7edf7fc7bc2a9b822749fb03707e1ca0
https://www.facebook.com/DePeLabirint/videos/798387753631604/?pnref=story
Where are you now decide what you do next.
Agree, they will not rush in but how many 10 years do they have.
Visit the nursing Home and Mandai will change ones look at life.
https://fb-s-d-a.akamaihd.net/h-ak-xap1/v/t1.0-0/p206x206/17264766_10210025724932607_6082543151934735575_n.jpg?oh=f7ec71b2bb48aa76aa045d2c12c1b360&oe=595B5225&__gda__=1495920451_7edf7fc7bc2a9b822749fb03707e1ca0
https://www.facebook.com/DePeLabirint/videos/798387753631604/?pnref=story
Where are you now decide what you do next.
HDB is 100% for Singaporeans and PRs and those in future are willing to be called Singaporeans.
Land is also 100% for Singaporeans / PRs?
Private strata is supposed to be maybe about 50-75% for Singaporeans / PRs and the remaining % are for foreigners. Same principle for most other countries, no reason to expect or arrange otherwise.
Those who think the prices will drop to allow all Singaporeans who want to buy to get what they want will have a lot of disappointments in the roads ahead...
Transactions will spike in 2017 - hope fellow Singaporeans can still get what they are looking for.
I still believe property price especially OCR will crash by 2020.......... Reversion to the mean over past about 12 years...........
HDB is 100% for Singaporeans and PRs and those in future are willing to be called Singaporeans.
Land is also 100% for Singaporeans / PRs?
Private strata is supposed to be maybe about 50-75% for Singaporeans / PRs and the remaining % are for foreigners. Same principle for most other countries, no reason to expect or arrange otherwise.
Those who think the prices will drop to allow all Singaporeans who want to buy to get what they want will have a lot of disappointments in the roads ahead...
Transactions will spike in 2017 - hope fellow Singaporeans can still get what they are looking for.
I still believe property price especially OCR will crash by 2020.......... Reversion to the mean over past about 12 years...........
Have been explaining the red dot concept with you for the last 5 years...
Drop a bit can but not possible to revert to mean lah... even US says it is recovering from the financial crisis of 2008...
Let's scrutinize your red dot concept and whether it can stand up to scrutiny.........
Bishan:
1997: S$1400+ psf.
2005: S$800+ psf.
2008: S$1300+ psf.
2009: S$1000+ psf.
2016: S$1300+ psf.
From 1997 to 2005, the price dropped (800-1500)/1500 = -47% !!!!!!!
From 2008 to 2009, the price dropped (1000-1300)/1300 = -23% !!!!!!!
So the red dot concept failed!
In fact, the property price can drop for a consecutive 8 LONG YEARS despite Singapore being a LITTLE RED DOT!
Similar situation can be seen almost everywhere in Singapore! :smiley_simmons:
Have been explaining the red dot concept with you for the last 5 years...
Drop a bit can but not possible to revert to mean lah... even US says it is recovering from the financial crisis of 2008...
Can find another place that is more representative of OCR boh? Bishan very central leh...
Let's scrutinize your red dot concept and whether it can stand up to scrutiny.........
Bishan:
1997: S$1400+ psf.
2005: S$800+ psf.
2008: S$1300+ psf.
2009: S$1000+ psf.
2016: S$1300+ psf.
From 1997 to 2005, the price dropped (800-1500)/1500 = -47% !!!!!!!
From 2008 to 2009, the price dropped (1000-1300)/1300 = -23% !!!!!!!
So the red dot concept failed!
In fact, the property price can drop for a consecutive 8 LONG YEARS despite Singapore being a LITTLE RED DOT!
Similar situation can be seen almost everywhere in Singapore! :smiley_simmons:
Come on, Bishan is not in CCR, how can be very central?
You mean you want to take Tuas or Woodlands?????
Anyway, if 1 place in Singapore does not satisfy your "red dot" concept means your concept failed and does not apply universally, why need to take so many places when some more other places will also failed????????
Can find another place that is more representative of OCR boh? Bishan very central leh...
When we want to show a particular point, we use representative areas that are typical.
And there may be exceptions that do not follow but the general trend and average case follows our concerns or theory. That is the reason why we calculate mean and averages.
You should take Tuas, Woodlands, Clementi, Jurong East, Paya Lebar, Punggol and Sengkang to track.
Come on, Bishan is not in CCR, how can be very central?
You mean you want to take Tuas or Woodlands?????
Anyway, if 1 place in Singapore does not satisfy your "red dot" concept means your concept failed and does not apply universally, why need to take so many places when some more other places will also failed????????
Ok, then you can show us your average for all the places to prove your point then, I eagerly await................
When we want to show a particular point, we use representative areas that are typical.
And there may be exceptions that do not follow but the general trend and average case follows our concerns or theory. That is the reason why we calculate mean and averages.
You should take Tuas, Woodlands, Clementi, Jurong East, Paya Lebar, Punggol and Sengkang to track.
The new 50% no TDSR test neede is for equity loan and refinancing, so if one is to buy a new house, TDSR will still apply. I do not understand why the inconsistency.
The new 50% no TDSR test neede is for equity loan and refinancing, so if one is to buy a new house, TDSR will still apply. I do not understand why the inconsistency.
One who already created the Money the other have not create.
2008 the Whole World have been creating lot of money, now still creating.
Singapore already follow the US, they create Money we create control measure to absorb the money.
Then we create Money for infrastructure, education, medical etc.
Many people forget that TDSR was the straw that broke the camel's back in 2013. Nobody has any real clue why then. Now, with the revisions to the TDSR principles, most still see the impact as marginal. Most of these are thankfully invisible to most.
The new 50% no TDSR test neede is for equity loan and refinancing, so if one is to buy a new house, TDSR will still apply. I do not understand why the inconsistency.
In case you don't know, that kind statistics mask a lot of things.........
Otherwise if you look at the chart, it looks like OCR are terribly overpriced since its index is much higher than CCR! Like that OCR sure crashed lah!
杀鸡何须用牛刀？
Many people forget that TDSR was the straw that broke the camel's back in 2013. Nobody has any real clue why then. Now, with the revisions to the TDSR principles, most still see the impact as marginal. Most of these are thankfully invisible to most.
The impact may be great. For example, if I have a $2m property that is fully paid. I can draw out $1m. With this $1m, I can buy and fully pay a $1m property and draw out $500k. With a fully paid $500k property, I can draw out $250k and fully pay a $250k property and draw out $125k. Total loan becomes:
1. $2m property, draw out $1m. Loan $1m.
2. $1m property, draw out $500k. Total loan $1.5m.
3. $500k property, draw out $250k. Total loan $1.75m.
4. $250k property, draw out $125k. Total loan $1.875m.
So, I now have total 4 property ($2m+$1m+$500k+$250k = $3.75m) and have total loan of $1.875m.
So this relaxation of TDSR can give me the chance to buy 3 more properties, but each subsequent one being half the price of the earlier one.
So, it is clear that this TDSR changes is a relaxation of property cooling measures?
But why Gov claimed that the changes is not a relaxation of property cooling measures?
By allowing people to loan more, it is a property loan relaxation measures!
The impact may be great. For example, if I have a $2m property that is fully paid. I can draw out $1m. With this $1m, I can buy and fully pay a $1m property and draw out $500k. With a fully paid $500k property, I can draw out $250k and fully pay a $250k property and draw out $125k. Total loan becomes:
1. $2m property, draw out $1m. Loan $1m.
2. $1m property, draw out $500k. Total loan $1.5m.
3. $500k property, draw out $250k. Total loan $1.75m.
4. $250k property, draw out $125k. Total loan $1.875m.
So, I now have total 4 property ($2m+$1m+$500k+$250k = $3.75m) and have total loan of $1.875m.
So this relaxation of TDSR can give me the chance to buy 3 more properties, but each subsequent one being half the price of the earlier one.
2009 is actually close to a decade ago.
Soon the index will all be re-based to a different year, maybe 2018, 2020, whatever. When that happens, it will be the time of the new equilibrium and fresh starting points.
Identify the ground conditions, and one will always be able to find the best deals. You yourself concluded that the statistics mask a lot of things, but by and large, the largest gains by proportion in the last 10 years still belong to the OCR.
If you study the entry level small car prices versus the large luxury car prices the same situation can be observed.
In case you don't know, that kind statistics mask a lot of things.........
Otherwise if you look at the chart, it looks like OCR are terribly overpriced since its index is much higher than CCR! Like that OCR sure crashed lah!
So, it is clear that this TDSR changes is a relaxation of property cooling measures?
But why Gov claimed that the changes is not a relaxation of property cooling measures?
By allowing people to loan more, it is a property loan relaxation measures!
The TDSR from the beginning is a severely unfair policy for those vested early in the property market, especially the part about not being able to refinance.
A property also has value or is an asset only if it's value can be unlocked in times of need. I feel the relaxation is more to fulfil it's natural asset function rather than to allow loaning more, even though some owners will also utilise that. The psychology of the relaxation is more impactful than the owners going for maximum loan, and I can't be sure how many will take it up.
bargain hunter
19-03-17, 18:39
The impact may be great. For example, if I have a $2m property that is fully paid. I can draw out $1m. With this $1m, I can buy and fully pay a $1m property and draw out $500k. With a fully paid $500k property, I can draw out $250k and fully pay a $250k property and draw out $125k. Total loan becomes:
1. $2m property, draw out $1m. Loan $1m.
2. $1m property, draw out $500k. Total loan $1.5m.
3. $500k property, draw out $250k. Total loan $1.75m.
4. $250k property, draw out $125k. Total loan $1.875m.
So, I now have total 4 property ($2m+$1m+$500k+$250k = $3.75m) and have total loan of $1.875m.
So this relaxation of TDSR can give me the chance to buy 3 more properties, but each subsequent one being half the price of the earlier one.
but this brilliant idea, how realistic is it in implmentation? can u imagine the old rich with a gcb? draw out 50% whack another unit half its price and so on? they can easily own more than 10 more units if the banks allow it?
Amber Woods
19-03-17, 18:44
The impact may be great. For example, if I have a $2m property that is fully paid. I can draw out $1m. With this $1m, I can buy and fully pay a $1m property and draw out $500k. With a fully paid $500k property, I can draw out $250k and fully pay a $250k property and draw out $125k. Total loan becomes:
1. $2m property, draw out $1m. Loan $1m.
2. $1m property, draw out $500k. Total loan $1.5m.
3. $500k property, draw out $250k. Total loan $1.75m.
4. $250k property, draw out $125k. Total loan $1.875m.
So, I now have total 4 property ($2m+$1m+$500k+$250k = $3.75m) and have total loan of $1.875m.
So this relaxation of TDSR can give me the chance to buy 3 more properties, but each subsequent one being half the price of the earlier one.
The same bank which approve your equity-loan will not provide you another loan to buy your next property using the cash you get from the equity-loan. Equity loan means the loan is for anything else other than property. You may get around this problem by getting your next property loan from another bank bearing in mind that you will also be subjected to ABSD.
If you leverage this way and if prices fall 30%, your $3.75m worth of properties will be worth $2.625m. Your total loan is only $1.875m so you are still not under water. In the worst case scenario, you loose your job and need to sell all of your investment properties to pay for the loan of $1.875m, you are still cash positive of $750K. Effectively, your $2m become $750K due to your leverage in multiple property.
If you have $2m fully paid property, the government is not overly concern with this group of people since you can afford to loose $1.25m if things really turn bad. If the $2m property is your only asset, you are likely to downgrade to a resale HDB flat if things are not going your way.
but this brilliant idea, how realistic is it in implmentation? can u imagine the old rich with a gcb? draw out 50% whack another unit half its price and so on? they can easily own more than 10 more units if the banks allow it?
In practice, only a few groups might do it.
1. Cashing out to support children in property purchase or other needs.
2. Cashing out for retirement needs.
3. Making use of the still low interest rate
These people do not need another loan if they have enough cash and CPF at hand to pay off the new property in whole. They likely will have to pay ABSD unless its their children or relative purchasing (first owner).
Whether many take up this option remains to be seen (like the Silver sheme for HDB lease purchase). But having an additional scheme does support the market by further qualifying the already rich who likely prefers property as assets.
bargain hunter
19-03-17, 19:14
In practice, only a few groups might do it.
1. Cashing out to support children in property purchase or other needs.
2. Cashing out for retirement needs.
3. Making use of the still low interest rate
These people do not need another loan if they have enough cash and CPF at hand to pay off the new property in whole. They likely will have to pay ABSD unless its their children or relative purchasing (first owner).
Whether many take up this option remains to be seen (like the Silver sheme for HDB lease purchase). But having an additional scheme does support the market by further qualifying the already rich who likely prefers property as assets.
what about a hardcore property investor/believer who is a retiree/semi-retiree and had hands tied for 5 years. (sounds like one of our bros here). kekeke.
what about a hardcore property investor/believer who is a retiree/semi-retiree and had hands tied for 5 years. (sounds like one of our bros here). kekeke.
Luckily he has too much in loans and unlikely to meet 50% payment for the ones he has. Heng arh.
bargain hunter
19-03-17, 20:00
Luckily he has too much in loans and unlikely to meet 50% payment for the ones he has. Heng arh.
but its possible for a gcb owner...
but its possible for a gcb owner...
Not merely GCB owner, anyone who has a property more than 75% paid up (or whose property price has grown by folds since purchase) will understand the difference of the clear articulation of this relaxation, as compared to the strict enforcement of TDSR even during refinancing. It allows the recognition of the full value of the assets.
The exception being HDB that cannot receive mortgage equity loans.
bargain hunter
19-03-17, 21:23
Not merely GCB owner, anyone who has a property more than 75% paid up (or whose property price has grown by folds since purchase) will understand the difference of the clear articulation of this relaxation, as compared to the strict enforcement of TDSR even during refinancing. It allows the recognition of the full value of the assets.
The exception being HDB that cannot receive mortgage equity loans.
perhaps the multiple property theory is not realistic but like u said, for those which have paid up a lot of their properties, the hidden potential is there. even buy 1 more unit each collectively is already damn power lol.
perhaps the multiple property theory is not realistic but like u said, for those which have paid up a lot of their properties, the hidden potential is there. even buy 1 more unit each collectively is already damn power lol.
Still applicable in the sense that previously someone for example who has paid up 80% (loan left 20%) will never be able to loan again or raise enough cash for a second purchase with the previous TDSR rules. Or if he has paid up 50% but property price rose by 100+%, resulting in him effectively able to loan out more based on current property prices.
In this revision, they can loan back 30%, and plus existing cash and CPF pay 100% for a subsequent property plus taxes (for himself / herself or for a relative). The full cash down property can then be used for two homes, or for any one to be rented out... Some retirees are looking for smaller homes to stay I guess...
So why when they implemented TDSR, they have not carefully considered from all sides, especially that TDSR will badly impact these group of people you mentioned and what gov said about helping these people by this new relaxation of TDSR measures?
Mmm, now it seems that TDSR has not been carefully scrutinized and thought out before implementation so much so that they must now change the rules of the TDSR property cooling measures to prevent unfairly penalizing these group of people (hence they stressing and claiming that "this is not a relaxation of property cooling measure")........ :banghead:
Still applicable in the sense that previously someone for example who has paid up 80% (loan left 20%) will never be able to loan again or raise enough cash for a second purchase with the previous TDSR rules. Or if he has paid up 50% but property price rose by 100+%, resulting in him effectively able to loan out more based on current property prices.
In this revision, they can loan back 30%, and plus existing cash and CPF pay 100% for a subsequent property plus taxes (for himself / herself or for a relative). The full cash down property can then be used for two homes, or for any one to be rented out... Some retirees are looking for smaller homes to stay I guess...
In 2013, it was urgent that property prices had to be reined in. The Govt had thrown in a dozen measures but still prices continued to grow.
The TDSR was the most stringent any country had ever seen up to date, and could only have been implemented in Singapore.
Imposing TDSR requirement at refinancing was very draconian and unfair to the retirees (very affluent retirees mind you) at that point, and an exemption till 2017 was made then quite soon after implementation if you remember. During the period till 2017, many of them have had to sell or consider other retirement plans, or at least reduce some property count. Only those who firmly believe in property or whom stayed inside the properties stayed on. That helped to increase supply all around as it appeared that asset prices will not be allowed to be recognised - asset value "destruction" to curb speculation.
Ended up we were the only country in the world to succeed in curbing property price growth. But sooner or later it had to be tweaked. I suppose this is a good time to do so.
So why when they implemented TDSR, they have not carefully considered from all sides, especially that TDSR will badly impact these group of people you mentioned and what gov said about helping these people by this new relaxation of TDSR measures?
Mmm, now it seems that TDSR has not been carefully scrutinized and thought out before implementation so much so that they must now change the rules of the TDSR property cooling measures to prevent unfairly penalizing these group of people (hence they stressing and claiming that "this is not a relaxation of property cooling measure")........ :banghead:
Singapore can only reclaim so much land.
Just waiting for the market to move than get another one.
Very soon property market will move up.
The TDSR revisions not only exempted all owners from TDSR at refinancing, they also allowed all owners to engage in mortgage equity loans if required.
This one more interesting, how many are there in this "mortgage equity loans".
I am one of them in 2011 before ABSD. bought my first private in 2006.
So the owner of the property before 2006 will be in this game.
Wonder how many of such player.
I am one of them.. my family even used my nieces name to leverage. One can leverage quite a lot more if you go priority bank and show that you have X mio of cash in their acccount.
I have so far benefited from low interest rate though I agree it is a double edge sword.
Agree, they will not rush in but how many 10 years do they have.
Visit the nursing Home and Mandai will change ones look at life.
https://fb-s-d-a.akamaihd.net/h-ak-xap1/v/t1.0-0/p206x206/17264766_10210025724932607_6082543151934735575_n.jpg?oh=f7ec71b2bb48aa76aa045d2c12c1b360&oe=595B5225&__gda__=1495920451_7edf7fc7bc2a9b822749fb03707e1ca0
https://www.facebook.com/DePeLabirint/videos/798387753631604/?pnref=story
Where are you now decide what you do next.
Yes, how many 10 years does one have..
I have a few colleagues who are quite rich, partly thier salary are quite high and also they have a few investment properties that were bought in the 1990s and now already solid liao.. These colleagues are now in the wealth preservation mode while I am still in the wealth seeking mode. Thanks to the low interest rate (I know because i used to pay 5.5%), I took on a more aggressive mode. Till date, I think I manage to catch up with 1 or 2 colleagues who have been in a wealth preservation mode..
Yes, how man 10 years of low interest rate do we have. Dont' get me wrong, I am just sharing as I benefited a lot from this forum especially the Bond Thread.
In practice, only a few groups might do it.
1. Cashing out to support children in property purchase or other needs.
2. Cashing out for retirement needs.
3. Making use of the still low interest rate
These people do not need another loan if they have enough cash and CPF at hand to pay off the new property in whole. They likely will have to pay ABSD unless its their children or relative purchasing (first owner).
Whether many take up this option remains to be seen (like the Silver sheme for HDB lease purchase). But having an additional scheme does support the market by further qualifying the already rich who likely prefers property as assets.
In Practice, only a few will do it as the ABSD will bite in.
Agree, that's why I feel the ball is now mainly in the hands of foreign buyers, some of which are exempt from ABSD. And the foreigner groups that do not mind paying the ABSD as long as there is certainty that there is a price support level.
In Practice, only a few will do it as the ABSD will bite in.
Still applicable in the sense that previously someone for example who has paid up 80% (loan left 20%) will never be able to loan again or raise enough cash for a second purchase with the previous TDSR rules. Or if he has paid up 50% but property price rose by 100+%, resulting in him effectively able to loan out more based on current property prices.
In this revision, they can loan back 30%, and plus existing cash and CPF pay 100% for a subsequent property plus taxes (for himself / herself or for a relative). The full cash down property can then be used for two homes, or for any one to be rented out... Some retirees are looking for smaller homes to stay I guess...
can i rephrase/summarize your points by saying that:
1) tdsr allows loan against income
2) while current relaxation re-allows loan against asset value
3) the general run-up since 2009, or even 2005-6 for earlier buyers (e.g. retirees who have an incentive to re-enter market for children/retirement asset's sake) means existing property owners have the home-equity base to re-participate in market
4) however, TDSR (for new properties) and ABSD are still in force. this means only the very rich or foreign buyers can participate in the short term
5) given general increase in household income levels, OCR will still move upwards over the medium term due to pent-up demand. This will in turn provide a floor CCR and RCR prices. The ceiling will still depend on foreign buyers
did i get you right, and are there additional points i didn't mention?
thanks for your contributions and insights. they are a useful counterpoint to the prevailing views.
Mostly yes.
Additionally, the restructuring of TDSR means that:
1. Some owners (without or with very little income) who previously can only sell to raise liquidity now have the option to hold and raise liquidity - drop in resales supply, and potentially raise some demand.
2. If they choose to buy again (unless in the name of relatives without ownership), they have to pay ABSD as well.
3. If they don't have income, they can still buy again by paying off for a subsequent property in cash, CPF and loans hedged against existing assets, previously disallowed under TDSR.
4. Increased foreigner purchases will occur for those who need a place in Singapore as a base, and since prices have already come off their heights and won't run away that fast, plus Govt hint as a result of the relaxation stance. This will coincide with local pent up demand, and all sectors will see increases in transactions.
Resale prices appear to have been recovering for several months already. But what should move more currently should be transactions rather than prices. When supply dwindles as demand grows, prices will start to rise again, but the velocity will not be what we witnessed before TDSR in 2013.
Thanks for reading.
can i rephrase/summarize your points by saying that:
1) tdsr allows loan against income
2) while current relaxation re-allows loan against asset value
3) the general run-up since 2009, or even 2005-6 for earlier buyers (e.g. retirees who have an incentive to re-enter market for children/retirement asset's sake) means existing property owners have the home-equity base to re-participate in market
4) however, TDSR (for new properties) and ABSD are still in force. this means only the very rich or foreign buyers can participate in the short term
5) given general increase in household income levels, OCR will still move upwards over the medium term due to pent-up demand. This will in turn provide a floor CCR and RCR prices. The ceiling will still depend on foreign buyers
did i get you right, and are there additional points i didn't mention?
thanks for your contributions and insights. they are a useful counterpoint to the prevailing views.
Mostly yes.
Additionally, the restructuring of TDSR means that:
1. Some owners (without or with very little income) who previously can only sell to raise liquidity now have the option to hold and raise liquidity - drop in resales supply, and potentially raise some demand.
2. If they choose to buy again (unless in the name of relatives without ownership), they have to pay ABSD as well.
3. If they don't have income, they can still buy again by paying off for a subsequent property in cash, CPF and loans hedged against existing assets, previously disallowed under TDSR.
4. Increased foreigner purchases will occur for those who need a place in Singapore as a base, and since prices have already come off their heights and won't run away that fast, plus Govt hint as a result of the relaxation stance. This will coincide with local pent up demand, and all sectors will see increases in transactions.
Resale prices appear to have been recovering for several months already. But what should move more currently should be transactions rather than prices. When supply dwindles as demand grows, prices will start to rise again, but the velocity will not be what we witnessed before TDSR in 2013.
Thanks for reading.
given your points 1-3, OCR should benefit more than RCR and CCR?
could you also share your opinions on:
a) how will the iskandar projects and the high speed railway affect the own 1-rent 1 model here, especially for HDB and OCR properties?
b) how will the redevelopment of the great southern waterfront area affect existing property prices?
c) given that "the velocity will not be what we witnessed before TDSR in 2013", the Exec Condo initiative, the potential impact of iskandar & HSR, macro-economic black swans, adoption of new construction technologies/materials (i.e. big difference in condos being built now and just 10 years ago), does it still make sense to invest in OCR and even fringe RCR projects at current prices +/- 10%?
I think Southern waterfront may only take place much later (not sure) and by then, population increase will be able to absorb/digest the supply. If have money, just invest on the freehold CCR region. Will never go wrong.
I am not a big fan of Iskandar, so not sure if this has an impact.
Not necessarily. Some of these properties that can be used for hedging are worth over 10 million...
Btw, I am not a crystal ball. There is risk in all actions we undertake and we need to assess where and what and how and how much risk to go for... We need to understand what our game plan is, then you know which sector suits you more. I believe you are capable of assessing the impact of HSR (which employs huge numbers of people to man), redevelopment of Greater Southern Waterfront and how it changes the game for each district, and all other factors and risks.
I have always been long term supportive of selected OCR regions near employment hubs as a caveat though due to many reasons.
given your points 1-3, OCR should benefit more than RCR and CCR?
could you also share your opinions on:
a) how will the iskandar projects and the high speed railway affect the own 1-rent 1 model here, especially for HDB and OCR properties?
b) how will the redevelopment of the great southern waterfront area affect existing property prices?
c) given that "the velocity will not be what we witnessed before TDSR in 2013", the Exec Condo initiative, the potential impact of iskandar & HSR, macro-economic black swans, adoption of new construction technologies/materials (i.e. big difference in condos being built now and just 10 years ago), does it still make sense to invest in OCR and even fringe RCR projects at current prices +/- 10%?
thanks stl67 and Kelonguni.
Really appreciate the insights.
big-ticket item, 1 foot wrong and it can be a mistake to pay for over a long time. given so many complexities, trying to reduce risk by getting more learned opinion.
Our pressure, pleasure I mean...
All sectors are linked. When OCR benefits, some OCR owners may decide to "upgrade" to a more preferable location, supporting RCR and CCR.
Also depends on your incomes, financial situations etc. No one rule fits all, but there is bound to be something in the market for all.
thanks stl67 and Kelonguni.
Really appreciate the insights.
big-ticket item, 1 foot wrong and it can be a mistake to pay for over a long time. given so many complexities, trying to reduce risk by getting more learned opinion.
Our pressure, pleasure I mean...
All sectors are linked. When OCR benefits, some OCR owners may decide to "upgrade" to a more preferable location, supporting RCR and CCR.
Also depends on your incomes, financial situations etc. No one rule fits all, but there is bound to be something in the market for all.
no pressure if you're not profiting, merely sharing!
even if the outcome is not what's predicted, the premises and views shared during the discussion can be valuable.
yes, the options are wide-open especially because incomes and financial situations can change in a few years. with that, "the best" objective/strategy of buying for yield, short term or long term capital appreciation can change too.
then there's the changing external paradigm, which is challenge even for the experienced...which is where a good discussion really helps.
Yes, I was in your shoes not so long ago.
Luckily have always been reflecting about my parents' choices since young, and matching their outcomes against others.
Till today, I am still keeping track of my decision-making processes and emotions so that I can learn from them, pass it on, and pass the lessons to my children in the future.
no pressure if you're not profiting, merely sharing!
even if the outcome is not what's predicted, the premises and views shared during the discussion can be valuable.
yes, the options are wide-open especially because incomes and financial situations can change in a few years. with that, "the best" objective/strategy of buying for yield, short term or long term capital appreciation can change too.
then there's the changing external paradigm, which is challenge even for the experienced...which is where a good discussion really helps.
HDB is 100% for Singaporeans and PRs and those in future are willing to be called Singaporeans.
Land is also 100% for Singaporeans / PRs?
Private strata is supposed to be maybe about 50-75% for Singaporeans / PRs and the remaining % are for foreigners. Same principle for most other countries, no reason to expect or arrange otherwise.
Those who think the prices will drop to allow all Singaporeans who want to buy to get what they want will have a lot of disappointments in the roads ahead...
Transactions will spike in 2017 - hope fellow Singaporeans can still get what they are looking for.
we shall see if transactions will spike in 2017!
Property stocks up is a forward indicator that property price is on it's way up.
Yes, I was in your shoes not so long ago.
Luckily have always been reflecting about my parents' choices since young, and matching their outcomes against others.
Till today, I am still keeping track of my decision-making processes and emotions so that I can learn from them, pass it on, and pass the lessons to my children in the future.
Lol. It's only after I've worked for a while and started my own family that I did the same - thought about parental choices, and wonder about the what ifs.
Volume already turning up. Clement Canopy, Grandeur park trend should be confirmed by park place resi. Add to these the earlier signs - forest woods, north park and high park.
And then there are developers who have to sell, due to absd rebate and qc deadlines. Some high end condos also coming to market.
Think kelonguni is right.
Property stocks up is a forward indicator that property price is on it's way up.
Even transaction volume increase is positive for property stocks. Not necessarily price increase, even though I strongly believe a turn is just around the corner.
Several other articles emerged recently regarding foreign buyers.
It is a speculation not a fact. Even foreigners coming in is also a speculation. Await official stats.
Powered by vBulletin® Version 4.2.2 Copyright © 2024 vBulletin Solutions, Inc. All rights reserved.