How will govt react if property price crash by 20-30% ??...

[ikan bilis]

We keep talking + being cautious about property price crashing…
Why not we tcss on how the govt will react if property price really crashed by 20-30%, and starts to affect the stability of the financial institutions...

[roly8]

if drop only by 5-10%, condo is ocr like sky habitant will still sell around $1400psf ,at worst scenario?

still quite an insane price ,right??

[Leeds]

If prices fall by 30% and people are not losing their jobs, it is not a problem at all. For prices to fall by 30% is probably right since our incomes have not risen by that much.

[Rosy]

If prices fall by 30% and people are not losing their jobs, it is not a problem at all. For prices to fall by 30% is probably right since our incomes have not risen by that much.

However, the price quantum for mass market condos has not risen much too.

Psf went up, sizes shrunk

[azeoprop]

Yah quantum remained about the same since 2009.

2 bedroom from 650k
3 bedroom from 750k

Just that the standard size for 2 bedroom dropped from 980sqft to 780sqft while 3 bedroom dropped from 1250sqft to 950sqft now.




Price was still the cheapest during the 2003-2006 period.

[speculator]

Simple.

For very sudden drop like Lehman Global Financial Crisis,

1. Stop all GLS and BTO with immediate effect
2. Remove all policies implemented under Cooling Measures 1-5
3. Start deferred payment scheme
4. Change the LTV. 100% loan plus deferred payment
5. Lastly Remove stamp duty completely

For gradual decline, then will do any of the above in small gradual steps.

When all else fails, make sure HDB stays steady. 80% voters to look after.

[Ilikeu]

They will start buying into properties themselves...

[roly8]

They will start buying into properties themselves...

developers already plan to keep unsold units & sell them as service apartments their selves..

so we will expect to see some very competitive rental war in the rental market...

[howgozit]

Simple.

For very sudden drop like Lehman Global Financial Crisis,

1. Stop all GLS and BTO with immediate effect
2. Remove all policies implemented under Cooling Measures 1-5
3. Start deferred payment scheme
4. Change the LTV. 100% loan plus deferred payment
5. Lastly Remove stamp duty completely

For gradual decline, then will do any of the above in small gradual steps.

When all else fails, make sure HDB stays steady. 80% voters to look after.

None of the above will happen

As seen in '97 crisis all cooling measures implemented in'96 were only removed in 2003..

The current CMs protects the banks with high LTVs. a 20-30% drop does not cause borrowers to get into negative equity.

[ysyap]

At today's fundamentals, unless something drastic happens on the international sector, local housing prices are unlikely to encounter a 30% drop. Minor correction at best...

If something drastic happens to crash home price, govt will definitely remove previous CMs to heat up market simply to maintain the sector moving...

[ysyap]

When all else fails, make sure HDB stays steady. 80% voters to look after.

We have been saying (me included) that the current population staying in HDB consists of up to 80% of our population. However, with more HDB owners upgrading to PCs and HDB rental market for foreigners is moving rapidly, the percentage of citizens staying in HDB who can vote is probably shrinking. We cannot assume that the figure 80% is still accurate. Hmmm...

[Poloclub]

At today's fundamentals, unless something drastic happens on the international sector, local housing prices are unlikely to encounter a 30% drop. Minor correction at best...

If something drastic happens to crash home price, govt will definitely remove previous CMs to heat up market simply to maintain the sector moving...

I cant foresee a crash, however it is possible that Singapore property might enter into a phase of flat growth or marginal decline when factor in inflation.

[hyenergix]

I cant foresee a crash, however it is possible that Singapore property might enter into a phase of flat growth or marginal decline when factor in inflation.

As long as population continues to grow naturally and new citizens/PRs/foreign workers are allowed in, there is a buoyancy for property prices. There is a limit on how much land near city center or MRT stations can be sold to keep prices from escalating too fast. When we are close to the limit, prices will rocket like mad. Just look at our COE prices when demand exceeds the COE supply.

[speculator]

None of the above will happen

As seen in '97 crisis all cooling measures implemented in'96 were only removed in 2003..

The current CMs protects the banks with high LTVs. a 20-30% drop does not cause borrowers to get into negative equity.

I don't see why none of the above.

http://app.mnd.gov.sg/Newsroom/NewsP...RA1=&RA2=&RA3=

[speculator]

None of the above will happen

As seen in '97 crisis all cooling measures implemented in'96 were only removed in 2003..

The current CMs protects the banks with high LTVs. a 20-30% drop does not cause borrowers to get into negative equity.

I don't see why none of the above.

http://app.mnd.gov.sg/Newsroom/NewsP...RA1=&RA2=&RA3=

[Allthepies]

We have been saying (me included) that the current population staying in HDB consists of up to 80% of our population. However, with more HDB owners upgrading to PCs and HDB rental market for foreigners is moving rapidly, the percentage of citizens staying in HDB who can vote is probably shrinking. We cannot assume that the figure 80% is still accurate. Hmmm...

yup and not counting those who have hdb address but stay in private and those who stay in hdb but have private properties!

[stl67]

Simple.

For very sudden drop like Lehman Global Financial Crisis,

1. Stop all GLS and BTO with immediate effect
2. Remove all policies implemented under Cooling Measures 1-5
3. Start deferred payment scheme
4. Change the LTV. 100% loan plus deferred payment
5. Lastly Remove stamp duty completely

For gradual decline, then will do any of the above in small gradual steps.

When all else fails, make sure HDB stays steady. 80% voters to look after.

i bascially agrees with this. government dont like to see huge fluctuation lah.. no good for investor and also, huge price drop means stamp duty lesser leh, but they will not remove stamp duty lah

[Poloclub]

As long as population continues to grow naturally and new citizens/PRs/foreign workers are allowed in, there is a buoyancy for property prices. There is a limit on how much land near city center or MRT stations can be sold to keep prices from escalating too fast. When we are close to the limit, prices will rocket like mad. Just look at our COE prices when demand exceeds the COE supply.

COE and property supply is heading in opposite direction at the moment and Singapore has not reach a stage where we are running out of land for building apartment. As long as government continue to expand MRT network and releasing land for HDB and PC, there will be sufficient supply to accommodate population growth.

[insigina]

As long as population continues to grow naturally and new citizens/PRs/foreign workers are allowed in, there is a buoyancy for property prices. There is a limit on how much land near city center or MRT stations can be sold to keep prices from escalating too fast. When we are close to the limit, prices will rocket like mad. Just look at our COE prices when demand exceeds the COE supply.

No doubt land near city center or mrt is limited but note that there are lots of mrt stations yet to open. Imagine each mrt station sprout up and govt releases 4 to 6 parcels surrounding it...there will still be demand for these developments because people living in the vicinity will want to upgrade and be close to familiar surroundings, etc. Punggol is a good test case. Put in an integrated facility and the surroundings will correspondingly boom. Can you imagine if this formula is repeated across 20 percent of all mrt stations (exclude circle line). There could well be a new definition of classifying such developments other than the current CCR/OCR. On this score, I believe prices will continue to stay firm.

[PN]

We have been saying (me included) that the current population staying in HDB consists of up to 80% of our population. However, with more HDB owners upgrading to PCs and HDB rental market for foreigners is moving rapidly, the percentage of citizens staying in HDB who can vote is probably shrinking. We cannot assume that the figure 80% is still accurate. Hmmm...

From Singapore Statistics, HDB dwellers is still >80%

In 2011, resident household by type of dwelling as below
HDB 82.6%
Condo & Private Flat 11%
Landed 5.8%

Compare to year 2000, there is a 5% drop for HDB and increase of 4.7% for condo & private. There isn't much changes for landed.
HDB 87.7%
Condo & Private Flat 6.3%
Landed 5.1%

Median Monthly Household Income also increases from 2000 to 2011 in each category
HDB increase from $4,398 to $7,037, and increase or 60%
Condo & Private Flat increase from $10,316 to $14,669 or 42.2%
Landed increase form $11,940 to $17,464 or 46.3%

Singaporean like properties. Got money, upgrade to condo or buy one for investment. That's why got people stay in condo & rent out HDB or vice versa.

One interesting observation is that there is 0.6% that is not accounted for in 2011. In 2000, it's only 0.2% that is not accounted for. Who are these people?

Are these people renting like Mr B? Moved oversea & sold away their properties?

[Juniper]

what we dont know is how many HDB dwellers already own private properties

[maisonjai]

In 2011, resident household by type of dwelling as below
HDB 82.6%
Condo & Private Flat 11%
Landed 5.8%
One interesting observation is that there is 0.6% that is not accounted for in 2011. In 2000, it's only 0.2% that is not accounted for. Who are these people?

Are these people renting like Mr B? Moved oversea & sold away their properties?

Public rental flats?

[Shanhz]

anyone here old enuff to personally or from immediate sources, remember that banks ask owners to top up ppty when outstanding loan amount > ppty valuation? i know there is a lot of hearsay, but did it actually happen? back in 1997/1998?

i have checked with my SCB and DBS banker. they say nothing of that sort even in worst times. AS LONG AS LOAN PAYMENT CONTINUES.

of course, if owner never pay up, that one dun say lah.

[chestnut]

if drop only by 5-10%, condo is ocr like sky habitant will still sell around $1400psf ,at worst scenario?

still quite an insane price ,right??

Bro, you have just down graded sky habitat by 1 notch. Sky Habitat is RCR.

Here is the map

http://spring.ura.gov.sg/lad/ore/log...ral_region.pdf

[phantom_opera]

They will start buying into properties themselves...

Beast (Best) answer

Anyway how can price correct 20-30% when most ppl loan only 60% ... holding powerful super strong leh

Of course if prolonged great depression is different story but our Gobama will never allow that ... QE4 confirmed in December when Dow hit 12k

[jeaprp]

anyone here old enuff to personally or from immediate sources, remember that banks ask owners to top up ppty when outstanding loan amount > ppty valuation? i know there is a lot of hearsay, but did it actually happen? back in 1997/1998?

i have checked with my SCB and DBS banker. they say nothing of that sort even in worst times. AS LONG AS LOAN PAYMENT CONTINUES.

of course, if owner never pay up, that one dun say lah.

Not that i heard of.
Bank did not ask for top up even during negative equity

[ikan bilis]

me never heard of banks call for top up on mortgage loan if negative equity....

but,...
friend told me there were calling on OD (Overdraft on property), which means the borrower had structured the loan as partial term loan (normal mortgage) and partial OD. Or sometimes OD type of loan is used when borrower is >65yr old liow... so watch out if you have OD on property and negative equity during crisis...

next/future,...
i do not know if banks will call top up on equity loans during next crisis... me had been thinking of paying back my equity loans since also no good place/way to invest it...

[Shanhz]

me never heard of banks call for top up on mortgage loan if negative equity....

but,...
friend told me there were calling on OD (Overdraft on property), which means the borrower had structured the loan as partial term loan (normal mortgage) and partial OD. Or sometimes OD type of loan is used when borrower is >65yr old liow... so watch out if you have OD on property and negative equity during crisis...

next/future,...
i do not know if banks will call top up on equity loans during next crisis... me had been thinking of paying back my equity loans since also no good place/way to invest it...

this depends on the loan structure and documentation. if you ask any bankers, they will explain why. OD is considered unsecured loan, whereas ppty loan is term loan. usually for term loan, as long as you continue payment, they CANNOT recall the loan (legally yes, the documentation sure cover the bank 110%, but practically no).

For OD, they can ask you to repay anytime, that is true.

maybe the bankers here can confirm.

[DKSG]

From what I know in the office, there are hundreds of people asking Office Boy to inform them if property market corrects by 5-10%.

They are going to cheongster style the property market if they see a slight correction.

And mind you, my office is BIG Office ok ?

At the moment, there are already many people waiting on the sidelines for anything that is selling more than 3% below last done.

DKSG

[newbie11]

Agree with office boy..