More measures to cool market

[kane]

those buyers holding their options the just bought in the last few days, planning for a 70% loan will have to rethink their plan.

[teddybear]

It's time they split stats for new launch and resale, then they will see the overheating is in new launch! So shouldn't they just impose measures to target cooling of new launch, like for example SSD 4 years start from TOP date & not date of S&P? Or they won't because they want to sell more land at high price? Shouldn't geniune investors or for own stay buy completed properties than those under construction which they can't rent out or live in immediately? They just don't get it or ???

New measures to cool Singapore's property market

Thu, Jan 13, 2011
AsiaOne

SINGAPORE - The Singapore government today announced new measures to maintain a stable and sustainable property market, which will take effect by tomorrow, January 14.

From tomorrow, the holding period for the imposition of Seller's Stamp Duty (SSD) will be increased from the current three years to four years.

Currently, for residential properties bought on or after 30 August 2010, SSD is imposed on the sale of such properties within three years of purchase. This followed the introduction of SSD for residential properties bought on or after 20 February 2010.

The SSD rates will also be increased sharply so as to provide a strong disincentive for investors looking to make
short term gains. The impact of the SSD is especially significant as it is payable regardless whether the property is eventually sold at a gain or loss.

For residential properties bought on or after 14 January 2011, the SSD rates to be levied on the full consideration will be increased to as follows:

SSD at 16 per cent (higher than up to 3 per cent currently), if the property is sold in the first year of purchase, i.e. the property is held for 1 year or less from its purchase date.

SSD at 12 per cent (higher than up to 2 per cent currently), if the property is sold in the second year of purchase, i.e. the property is held for more than 1 year and up to 2 years.

SSD at 8 per cent (higher than up to 1 per cent currently), if the property is sold in the third year of purchase, i.e. the property is held for more than 2 years and up to 3 years.

SSD at 4 per cent (no SSD currently), if the property is sold in the fourth year of purchase, i.e. the property is held for more than 3 years and up to 4 years.
Currently, the SSD rates are levied at the same rate as buyer's stamp duty, i.e. 1 per cent for the first $180,000, 2 per cent for the next $180,000 and 3% on the balance. The SSD rates are tiered according to the duration of the holding period, i.e. the seller pays the full SSD rate if the residential property is sold in the first year of purchase; 2/3 the full SSD rate if the sale is in the second year; 1/3 the full SSD rate if in the third year.


Changes to Loan-To-Value limit

The Loan-To-Value (LTV) limit on housing loans granted by financial institutions regulated by MAS for property purchasers who are not individuals will be lowered to 50 per cent. This includes corporations, trusts and collective investment schemes, among others, as well as to joint property purchases by an individual and a purchaser who is not an individual.

Meanwhile, the LTV limit on housing loans granted by financial institutions regulated by MAS individuals with one or more outstanding housing loans at the time of the new housing purchase will be lowered from 70 per cent to 60 per cent.

However, borrowers who can show evidence that they have sold their existing properties will not be subject to the lower LTV limit when they buy a new property. Where the existing property is a private property, he can show a signed Sale & Purchase (S&P) agreement with the IRAS certificate showing that stamp duty has been paid on it. Where the existing property is a HDB flat, he can show HDB's approval letter to sell the flat, that HDB will issue within 2 weeks of the First Appointment. These borrowers will still be able to borrow at an 80 per cent LTV from financial institutions.

Borrowers without any outstanding housing loans continue to have a LTV cap of 80 per cent.

These rules apply to housing loans granted by financial institutions for private residential properties, Executive Condominiums, HUDC flats and HDB flats (including DBSS flats).

Loans granted by HDB for HDB flats (including DBSS flats) will still have a LTV cap of 90 per cent.

The Government will continue to monitor the property market closely and take further steps to promote a stable and sustainable property market if necessary.

[rattydrama]

My colleague just sold her apt near kemangan mrt on 27 dec not sure buyer will backout? Record high leh but below 1m...

[jwong71]

It's time they split stats for new launch and resale, then they will see the overheating is in new launch! So shouldn't they just impose measures to target cooling of new launch, like for example SSD 4 years start from TOP date & not date of S&P? Or they won't because they want to sell more land at high price? Shouldn't geniune investors or for own stay buy completed properties than those under construction which they can't rent out or live in immediately? They just don't get it or ???

its a matter of time,measures coming in again.

[kane]

It's time they split stats for new launch and resale, then they will see the overheating is in new launch! So shouldn't they just impose measures to target cooling of new launch, like for example SSD 4 years start from TOP date & not date of S&P? Or they won't because they want to sell more land at high price? Shouldn't geniune investors or for own stay buy completed properties than those under construction which they can't rent out or live in immediately? They just don't get it or ???

teddy, if they didn't do this, where can you buy cheap subsale right?
Let the first guy take the hit then, like new cars, drive out of showroom, discount immediately. I've long maintained that it's irrational for new properties to be trading at more than 30% premium over neighbouring resale. 5% of the value can allow the owner to do a full reno + ID. And brand new doesn't even come with ID.

[bargain hunter]

in a way, seems like it hits the new sales less if anything, once again! sigh.

It's time they split stats for new launch and resale, then they will see the overheating is in new launch! So shouldn't they just impose measures to target cooling of new launch, like for example SSD 4 years start from TOP date & not date of S&P? Or they won't because they want to sell more land at high price? Shouldn't geniune investors or for own stay buy completed properties than those under construction which they can't rent out or live in immediately? They just don't get it or ???

[jwong71]

looks like 50% LTV for non individuals will put Enbloc to a STOP....

60% LTV....kind of expected...

the SSD machiam like capital gain tax!.....if market downturn how....those who sold at a loss still kena 4-16% SSD!!! wow....i tink SSD more jialat den cap gain tax leh....

now really small is beauitful liao......sianz.....more MMs to come

with the high SSD, i think MMs will die 1st, investors buying cos of affordabiliy and hoping to flip for profits within certain years. who really buy for rental yields, instead of capital gains.? unless u have millions and millions sitting in the bank,which you do not have any idea wad to do with it. then shld hoot the properties for rental yield

[moneyspinner]

its a matter of time,measures coming in again.

At the end of the day, they will make sure that they kill the property market for another umpty years!!!!!!!!!!!!!! Message is clear. Don't touch the property market if you have a short term mentality. Play other products if you want to.

[focus]

Stock Market huat AH! Excess money diverted...

[rattydrama]

Hdb resale price still high, never lower down fast enough as expected by government prior to erection. Not fast enough so need 16%. SSD kill the market short term.

[devilplate]

U should be alright. I worry for devil late. Late in running, selling and dancing,

Hehe tks for ur concern

[devilplate]

Expecting waterghosts to resurface again.... Hehe

[kaizhe]

Is that mean husband and wife or friend-friend jointly buying an unit will be given 50% loan only from tomorrow? Anyone can clear my doubt pls?

[rattydrama]

Is that mean husband and wife or friend-friend jointly buying an unit will be given 50% loan only from tomorrow? Anyone can clear my doubt pls?

If second ppty then 60%

[Wild Falcon]

Overseas now.. is this for real? Heng ar, I got rid of one investment...

I think those medium-ticket ones (e.g. 1.5 million and above) in trouble. 40% of 1.5 million = 600k. 600k cash for such high risk property investment and high SSD is NOT WORTH IT anymore.

[jwong71]

Overseas now.. is this for real? Heng ar, I got rid of one investment...

congrats to those who arent greedy.. properties are not necessary for mid-long term view anymore. its more like knowing when to enter and when to exit the market.

[kaizhe]

If second ppty then 60%

1st property lei? still 80% or chg to 50% ?

[red3443]

Will there be firesale soon????? Have been waiting till neck long long already!!!!

[rattydrama]

Pro government, pro first timer buyer, pro new comer, pro cash rich, pro absolute quantum, pro OCR

[azeoprop]

Luckily or unluckily I sold one unit in Dec.... now prices are set to plunge. Demand for units will be totally wiped out unless is really first timer for own stay only...even then people will give second thoughts about buying now.

More chances for starbuys though, and MM units will be even more popular. Especially those 2 bedrooms MM units.

[Wild Falcon]

Pro owner-occupier...

Pro government, pro first timer buyer, pro new comer, pro cash rich, pro absolute quantum, pro OCR

[sh]

Forced holding for 3-4y is definitely too risky from an investment perspective ... what if US 10y bond yield went to 8% 2y later Anything can happen in 4 years !!!

Pity those who bought > 1kpsf for Jurong Lake District story ... caught at the peak already

This is exactly the type of speculators the govern is trying curb... those that flip in 4 years. doesn't affect long term investors.

heng ah.... already got my property

[hyenergix]

These measures seem to target the pte properties and property funds.

Let's say a developer is selling a MM about $600k, now 40% downpayment is $240k. Larger units will need more. There are few people with so much cash upfront and the 1st buyer will not be able to flip easily.

Here're my predictions:

Most likely the new launches planned this month will be delayed due to potential buyers pulling out. Speculators who bought last year will also be hit when the units TOP in 2013 because it is difficult for the next buyer to flip. Reasonably priced units should be available from Q3 this year

[spikey69]

1st property lei? still 80% or chg to 50% ?

read la - 1st property still 80%

[devilplate]

Hdb resale price still high, never lower down fast enough as expected by government prior to erection. Not fast enough so need 16%. SSD kill the market short term.

Hdb not in the pic.... Solely pte ppty tis round....

[maisonjai]

These new cooling measures really cooling, new launches pricing will be hit & likely to affect overall prices (OCR or CCR slide 1st ?). Sales Vol plunge.
*Sorry ah, just wanted some inputs & not trying to start an argument between Bear & Sta . Anyway all on the same ppty boat.

Those no intention to hold, it may trigger pre-mature selling, hopefully there are enough buyers to soak up these mini firesales, otherwise whole mkt might dampen. Hunting season starts for DevilP.

The 40% downpay already kill off buying momentum, if didn't buy then how get penalise by SSD? Own stay not affected.

Will PO come out from his hibernation & speak? heehee

[august]

Hdb not in the pic.... Solely pte ppty tis round....

next is HDB lor, never say give heads up

[kingkong1984]

Got, ec will also kanna. Hdb not considered hit is because 5 yr mop anyway, if 100 percent ssd also not affected.

[sh]

its a matter of time,measures coming in again.

if measures come in again, means that prices are still going up.... yeah!!!!

[kingkong1984]

next is HDB lor, never say give heads up

Next rule hdb cannot own pte and pte cannot own hdb. U see lor