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Thread: MM lovers! What do think this 11 Jan CM has on MM?

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    Default MM lovers! What do think this 11 Jan CM has on MM?

    Since MM supply has been capped from previous CM, and if hdb owners wanna invest in pte property, mm having lower quantum will help as the impact of 7% ABSD will be not so sever, easier to get bank loan for the lower quantum (since the MSR has also been reduced, meaning can borrow less). So price will up? Down?

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    so now if buying 1st MM..monthly repayment cannot exceed 30% income?

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    Quote Originally Posted by leesg123
    Since MM supply has been capped from previous CM, and if hdb owners wanna invest in pte property, mm having lower quantum will help as the impact of 7% ABSD will be not so sever, easier to get bank loan for the lower quantum (since the MSR has also been reduced, meaning can borrow less). So price will up? Down?
    Interesting perspective ...never occur to my mind.

    U certainly think far ahead...wise man!

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    Quote Originally Posted by leesg123
    Since MM supply has been capped from previous CM, and if hdb owners wanna invest in pte property, mm having lower quantum will help as the impact of 7% ABSD will be not so sever, easier to get bank loan for the lower quantum (since the MSR has also been reduced, meaning can borrow less). So price will up? Down?
    MSR only affect hdb lah. Not private
    Just Do It! 要拼才会赢!

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    CMs favours 1st home buyers. And if its your only home it would probably for to stay.

    So MMs being primarily an investment property as it is generally unsuitable for families, my guess is that the demand may decline.

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    MM price will up as more demand due to increasing rentals sought by mtb folks

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    Quote Originally Posted by Cyberknight
    MSR only affect hdb lah. Not private
    no, MSR applies to all residential properties
    some cap at 35%

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    Quote Originally Posted by Laguna
    no, MSR applies to all residential properties
    some cap at 35%
    no leh...i think apply to HDB only

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    Quote Originally Posted by Laguna
    no, MSR applies to all residential properties
    some cap at 35%
    My read is that it is specific to public housing only
    When you have eliminate the impossible, whatever remains, however improbable, must be the truth

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    Quote Originally Posted by mcmlxxvi
    MM price will up as more demand due to increasing rentals sought by mtb folks
    Agree. MMs will become more valuable.

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    Quote Originally Posted by Laguna
    no, MSR applies to all residential properties
    some cap at 35%
    Should be for HDB only :
    http://app.mof.gov.sg/newsroom_detai...11631950567992

    11 The Government is also introducing measures to further moderate the demand for HDB flats, instil greater financial prudence among buyers, and require owner occupation by PR buyers. The following measures will take effect on 12 January 2013:
    a) Tighter eligibility for loans to buy HDB flats:

    i) MAS will cap the Mortgage Servicing Ratio (MSR) for housing loans granted by financial institutions2 at 30% of a borrower’s gross monthly income3 .

    ii) For loans granted by HDB, the cap on the MSR will be lowered from 40% to 35%.

    b) PRs who own a HDB flat will be disallowed from subletting their whole flat.

    c) PRs who own a HDB flat must sell their flat within six months of purchasing a private residential property in Singapore.


    ------------------------------------------------------------------
    I interpret it that if take bank loan than cannot be more than 30% , if take HDB loan then cannot be more than 35%.

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    Quote Originally Posted by hyenergix
    Agree. MMs will become more valuable.
    Valuable meaning increase in value? Ie. the psfs will go even higher than what they are now?

    I doubt

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    Quote Originally Posted by mcmlxxvi
    MM price will up as more demand due to increasing rentals sought by mtb folks
    Agree that price will go up. More buyers will target MMs since it is even more expensive to purchase larger units.

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    mm also cannot afford liow.... if i go buy mm ( as 3rd residential property) now, let's say $600K price....

    - BSD 3% + ABSD 10% = 13% * 600,000 - 5400 = $72,600
    - LTV = 40%, meaning $360K cash downpayment...

    total cash needed $433K cash...

    => if small fish like me, no game play liow lah....

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    ok, I finally finish reading what I think should call the 'CM To Kill'



    here is my opinion:

    1. There will be near 100% chance of a correction (unless of course suddenly US economy very good, Dow chiong through the roof with inflation scare which is nearly impossible short term)

    2. Big quantum unit will suffer more than smaller quantum units simply because of lower LTV and higher ABSD in absolute amount. CCR again will bear the brunt ... SC Global Simon Leung must be cursing

    3. Imagine a SPRING, MM/EC/HDB are below, CCR is on top, this CM is like dropping a heavy iron bar on the spring to press it down

    4. CCR will correct 10% ... that means back below 2007 pricing level, RCR probably 8%, OCR 5% and so on

    5. Since price corrects, rental yield will increase ... spread over interest rate will increase and a new equilibrium price is established after 6 months

    6. This will be the last CM as it badly affects the property developers, banks

    7. This is the first time PAP deviates from its policy of allowing SC to hold HDB + 1 PC .... but this won't be for long as money will then flow to Malaysia or other countries that PAP will not like to see

    8. If I read correctly, for 2nd property and beyond, cash payment of 25% is required thus CPF OA cannot be used for that 25% payment ....this is the ULTIMATE KILLER to developers and middle class HDB ugpraders

    9. Money will need to find other investment to hedge inflation ... high yield corp bond and REITs will be super hot but super-risky

    10. Those holding multiple PCs hoping for fantastic capital appreciation now will be cursing ... rent out and wait liao ... OCR rental still ok ... CCR will be risky if SIBOR moves up
    Last edited by phantom_opera; 11-01-13 at 22:21.
    Ride at your own risk !!!

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    Quote Originally Posted by ikan bilis
    mm also cannot afford liow.... if i go buy mm ( as 3rd residential property) now, let's say $600K price....

    - BSD 3% + ABSD 10% = 13% * 600,000 - 5400 = $72,600
    - LTV = 40%, meaning $360K cash downpayment...

    total cash needed $433K cash...

    => if small fish like me, no game play liow lah....
    Can always buy through proxy? Has this loop hole been covered?

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    Quote Originally Posted by phantom_opera
    ok, I finally finish reading what I think should call the 'CM To Kill'

    here is my opinion:

    1. There will be near 100% chance of a correction (unless of course suddenly US economy very good, Dow chiong through the roof with inflation scare which is nearly impossible short term)

    2. Big quantum unit will suffer more than smaller quantum units simply because of lower LTV and higher ABSD in absolute amount. CCR again will bear the brunt ... SC Global Simon Leung must be cursing

    3. Imagine a SPRING, MM/EC/HDB are below, CCR is on top, this CM is like dropping a heavy iron bar on the spring to press it down

    4. CCR will correct 10% ... that means back below 2007 pricing level, RCR probably 8%, OCR 5% and so on

    5. Since price corrects, rental yield will increase ... spread over interest rate will increase and a new equilibrium price is established after 6 months

    6. This will be the last CM as it badly affects the property developers, banks

    7. This is the first time PAP deviates from its policy of allowing SC to hold HDB + 1 PC .... but this won't be for long as money will then flow to Malaysia or other countries that PAP will not like to see

    8. If I read correctly, for 2nd property and beyond, cash payment of 25% is required thus CPF OA cannot be used for that 25% payment ....this is the ULTIMATE KILLER to developers

    9. Money will need to find other investment to hedge inflation ... high yield corp bond and REITs will be super hot but super-risky

    10. Those holding multiple PCs hoping for fantastic capital appreciation now will be cursing ... rent out and wait liao ... OCR rental still ok ... CCR will be risky if SIBOR moves up
    bro... like your analysis, .... but i think price will still hold....

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    Quote Originally Posted by ikan bilis
    bro... like your analysis, .... but i think price will still hold....
    China property market also went through correction after tough CMs introduced ... so u better pray that correction is only 10% ... for Echelon that means from 1800psf to 16xxpsf only mah, Sky Habitat will have to lower price to 1300psf lo
    Ride at your own risk !!!

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    hi,

    would anyone be kind to explain to me the possible scenario.

    will more people and PR be selling off their HDB and this will reduce the HDB prices in a drastic manner?

    will this increase the group of tenants as PR cant rent out HDB and tenants wont want to buy as too expensive ?

    should i wait or start my buying process
    thank you

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    Quote Originally Posted by property_finder
    Agree that price will go up. More buyers will target MMs since it is even more expensive to purchase larger units.
    Really? you think so too?

    MMs are mainly for investment.

    Would paying a 7% "fine" be considered a savy investment decision.

    With this kind of levy, I would think true investors would be looking elsewhere.

    Other types of property will still have a market because there is still demand for upgraders and first time homeowners.

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    Quote Originally Posted by howgozit
    Really? you think so too?

    MMs are mainly for investment.

    Would paying a 7% "fine" be considered a savy investment decision.

    With this kind of levy, I would think true investors would be looking elsewhere.

    Other types of property will still have a market because there is still demand for upgraders and first time homeowners.
    I am referring to upgraders too, especially those who want 'status' but do not really have lots of funds.
    The "fine" that you mentioned will be even greater if this group of people purchase larger units, so they will purchase and squeeze into MMs instead.

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    Quote Originally Posted by phantom_opera
    9. Money will need to find other investment to hedge inflation ... high yield
    corp bond and REITs will be super hot but super-risky
    Hi bro ghost, I agree with you that these forms of investments will be super hot but why will it be super risky?

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    Quote Originally Posted by buttercarp
    Hi bro ghost, I agree with you that these forms of investments will be super hot but why will it be super risky?
    that is because the yield is already super low and spread with SGS bond is very small e.g. 10y SGS bond is 1.4% while 10y corp bond is 3% and REIT 5%

    if SIBOR suddenly turns up to 2% ...
    Ride at your own risk !!!

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    If there is liquidity, why would sibor goes up now? Plus with more cash upfront, wouldn't that increase cash holdings by banks?

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    Quote Originally Posted by newbie11
    If there is liquidity, why would sibor goes up now? Plus with more cash upfront, wouldn't that increase cash holdings by banks?
    Yes. You are very right.

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    Quote Originally Posted by phantom_opera
    that is because the yield is already super low and spread with SGS bond is very small e.g. 10y SGS bond is 1.4% while 10y corp bond is 3% and REIT 5%

    if SIBOR suddenly turns up to 2% ...
    I am actually looking to sell bonds and buy more stocks.

    Cheers.

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    Quote Originally Posted by howgozit
    Really? you think so too?

    MMs are mainly for investment.

    Would paying a 7% "fine" be considered a savy investment decision.

    With this kind of levy, I would think true investors would be looking elsewhere.

    Other types of property will still have a market because there is still demand for upgraders and first time homeowners.
    MM is still the easiest route to a private property for a HDB upgrader. Given the hefty amount needed upfront for investment, the pipeline of property for rental should slow down and those who still go ahead to buy have to raise their rental to cover the higher cost. Prop investors will move overseas, and the likely destination is JB for the average investor.

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    Let me give you a few reasons why MM as an asset class will never die.

    1. Quantum - no further explanation needed

    2. Affordability - to tenants. Pls do not even
    mention hdb, as it is like comparing apples and oranges. People craving for apple's will not suddenly say oh I will have an orange instead.

    3. Proven track record - for the past 7 yrs, only up up and up some more

    4. Best profit - for developers, so they will always try their best to squeeze in MM units in any project if max profits are what they are after.

    5. Tax benefits - vs holding on to only one large property, the subsequent units of your multiple MM allows you to offset costs incurred already for first tenants.

    6. Risk reduction - vs leasing out one large init, if A can't find a tenant, B, C and D still have or can.

    7. Liquidity - spreading your eggs over a few MM is akin to introducing some better liquidity into your portfolio.

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    Quote Originally Posted by phantom_opera

    7. This is the first time PAP deviates from its policy of allowing SC to hold HDB + 1 PC .... but this won't be for long as money will then flow to Malaysia or other countries that PAP will not like to see
    not quite, bro. just that need to pay extra 7% and the extra down. if can afford, still can buy.

    the true deviation is when they force SC to sell their HDB

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    Quote Originally Posted by Shanhz
    not quite, bro. just that need to pay extra 7% and the extra down. if can afford, still can buy.

    the true deviation is when they force SC to sell their HDB
    Almost the same bcos 50pc ltv and 25pc cash for 2nd loan on top of 7pc absd
    Dun forget the 65y old cap on loan
    Ride at your own risk !!!

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