Call to relax some rules as property market wanes

[princess_morbucks]

http://www.businesstimes.com.sg/prem...wanes-20140111

THE government should relax some of its property-cooling measures as demand for real estate wanes.
This was the view of Getty Goh, director at Ascendant Assets, who felt this was necessary given "the lacklustre property market" and the likelihood that interest rates will rise this year and the next.
Speaking at the 12th Singapore Chinese Chamber of Commerce and Industry-Business Times (SCCCI-BT) Business Outlook Forum yesterday, Mr Goh said the government should consider repealing the Seller Stamp Duty (SSD) for residential properties introduced in January 2011, because sellers who are keen to dispose their properties may find themselves tied down by it.

'Before TDSR came in, all of these owners could simply refinance with another bank, but now because of TDSR, all of them are now stuck as they cannot go to another bank right now and refinance in the event that they own two or three properties.'
Getty Goh

[Wunderkind]

This makes sense. Instead of increasing land sales, the govt should look to relaxing the SSD to support the supply side. Land sales are bid at higher and higher prices which in turn means that the price of property will have to be kept high. Increasing supply through land sales does not work as developers are flushed with cash. In a rising interest rate environment , those who have holding power can hold on to their property while those who cannot can sell . The dynamics will create its market equilibrium given the fact that the property supply is now more than the demand.

[solsys]

Removing SSD will accelerate the drop and turn into avanlanche if things turn awry and everyone start throwing.

[Wunderkind]

Removing SSD will accelerate the drop and turn into avanlanche if things turn awry and everyone start throwing.

Unless there is a large pool of desperate sellers and no buyers. The underlying demand is still strong as Singapore's economy is still humming along. Singaporeans like to invest in property. That is a fact. So how can the market stabilizes if land sales continue to be sold at record bid price? Let the real sellers and real buyers engage in the market dynamics.

[oops]

Can consider imposing cooling measure on foreign developer.

[oops]

Effects of cooling measures have just started no long ago, highly unlikely to be remove so soon.

[oops]

Not forgetting current prices are still 60% above 2009 peak..

[Ringo33]

Actually the one who are suffering most in this situation are the property agents, I am not sure how many will have to force sell their property if incomes dries up. And I think this could be the one reason why government might have to reverse some of the cooling measures.

[amk]

Who is this Getty Goh ?

SSD can stay forever. This is to discourage flipping and pty speculative trading. Other countries have as long as 15yrs of seller "fees". About TDSR, if some one did not do proper financial planning, it is not the gov's fault.

Dun think gov will do anything. If ever, the 1st CM to be tweaked is ABSD. That is pure draconian and direct market intervention to artificially reduce demand.

[Ringo33]

Removing foreigners ABSD for Central Area of CCR. That to me is the best way forward.

a) Government get to sell prime land along Marina Bay
b) Property agents get to sell property
c) Foreigners get to buy prime property in Singapore

[teddybear]

Agree that it is ABSD that must go, because it is unfair and biased policies against PRs and foreigners, and "undemocratic".
Why should PRs be treated differently from purchasing goods (in this case "private properties") that are sold at market price?

Who is this Getty Goh ?

SSD can stay forever. This is to discourage flipping and pty speculative trading. Other countries have as long as 15yrs of seller "fees". About TDSR, if some one did not do proper financial planning, it is not the gov's fault.

Dun think gov will do anything. If ever, the 1st CM to be tweaked is ABSD. That is pure draconian and direct market intervention to artificially reduce demand.

[Ringo33]

Removing SSD will only benefit property agents as it will open flood gate for resale units to flood the market.

[mosaic]

Agree that it is ABSD that must go, because it is unfair and biased policies against PRs and foreigners, and "undemocratic".
Why should PRs be treated differently from purchasing goods (in this case "private properties") that are sold at market price?

hmmm i tend to disagree on the PR portion. I think there s a need to create a distinction between singaporean and PRs, in part because the government was dolling out PRs like toilet paper few years ago.

It was so easy to get, foreigners were simply applying for PR AND stopping at that (not going further for citizenship status to cement their commitment to singapore) just to gain the associated advantages for being a PR in singapore (which at that time did not very clear distinctions from being a singaporean). So we had plenty of PRs buying property, flipping them, making money, making use of the other facilities, etc than going overseas to the States, London etc to further themselves than giving up Singaporean PR eventually. Being a Singaporean PR should be a privilege, not a passport to better riches elsewhere.

[princess_morbucks]

Who is this Getty Goh ?

SSD can stay forever. This is to discourage flipping and pty speculative trading. Other countries have as long as 15yrs of seller "fees". About TDSR, if some one did not do proper financial planning, it is not the gov's fault.

Dun think gov will do anything. If ever, the 1st CM to be tweaked is ABSD. That is pure draconian and direct market intervention to artificially reduce demand.

I agree with you that if ever any CM will be tweaked it will be ABSD.
Yes, I also don't mind if SSD continues.
TDSR will be permanent.

[Ringo33]

hmmm i tend to disagree on the PR portion. I think there s a need to create a distinction between singaporean and PRs, in part because the government was dolling out PRs like toilet paper few years ago.

It was so easy to get, foreigners were simply applying for PR AND stopping at that (not going further for citizenship status to cement their commitment to singapore) just to gain the associated advantages for being a PR in singapore (which at that time did not very clear distinctions from being a singaporean). So we had plenty of PRs buying property, flipping them, making money, making use of the other facilities, etc than going overseas to the States, London etc to further themselves than giving up Singaporean PR eventually. Being a Singaporean PR should be a privilege, not a passport to better riches elsewhere.

The effect of the CM on PR buying HDB will be temporary, after 3 years, they will flood the market. So I reckon 2016/7 will be the start of another up cycle.

[star]

No need cms on private condo. Private condo should be a free market. What govt should do is cms on HDB and resale HDB. Alot of those interviewed said HDB is not for profit so hdb should back to basic. Buy $300k sell $300k.

[princess_morbucks]

No need cms on private condo. Private condo should be a free market. What govt should do is cms on HDB and resale HDB. Alot of those interviewed said HDB is not for profit so hdb should back to basic. Buy $300k sell $300k.

CMs for private property is to cushion the fall in case of a downturn.

It is to reduce the impact of a property bubble should a downturn occur.

[Warren49]

SG Govt will basically mirror what HK does. Once HK reduces the Buyers Stamp Duty for foreigners, you can expect SG to follow suit at similar rate too.

Other than that, I also don't see any measures being removed any time soon. Govt is testing waters now, using supply side measures first.

[star]

All cms for private condo should be removed just TDSR remain is enough. TDSR should remain because it is the best cm. All other cms should be removed.

[walkthetiger]

http://www.businesstimes.com.sg/prem...wanes-20140111

THE government should relax some of its property-cooling measures as demand for real estate wanes.
This was the view of Getty Goh, director at Ascendant Assets, who felt this was necessary given "the lacklustre property market" and the likelihood that interest rates will rise this year and the next.
Speaking at the 12th Singapore Chinese Chamber of Commerce and Industry-Business Times (SCCCI-BT) Business Outlook Forum yesterday, Mr Goh said the government should consider repealing the Seller Stamp Duty (SSD) for residential properties introduced in January 2011, because sellers who are keen to dispose their properties may find themselves tied down by it.

'Before TDSR came in, all of these owners could simply refinance with another bank, but now because of TDSR, all of them are now stuck as they cannot go to another bank right now and refinance in the event that they own two or three properties.'
Getty Goh

I do hope gov here start thinking about how to remove the CMs smoothly and gradually; as eventually they will need to. But, I don’t think this will not come so soon.

It appears only the investors attempting to build a case to show gov here that market is bad enough...nice try by publishing and presenting all sort of ideas, views and figures everywhere to prove…. But how much does current price dropped from the peak, just read the overall index…not much I would say.

[Dragonfly]

The interest rate will increase because many owners will find it difficult to refinance due to TDSR restriction. Hence, govt should consider those bought before the TDSR rules should allow to refinance without restricting them to the TDSR rules.

Many banks will start to take advantage of such situation to increase interest rate. If govt wants to reduce the risk of property bubbles, they should look into this area unless they are supporting banks to increase interest rate and force owners to pay more because they cannot refinance.

[RCT]

The interest rate will increase because many owners will find it difficult to refinance due to TDSR restriction. Hence, govt should consider those bought before the TDSR rules should allow to refinance without restricting them to the TDSR rules.

Many banks will start to take advantage of such situation to increase interest rate. If govt wants to reduce the risk of property bubbles, they should look into this area unless they are supporting banks to increase interest rate and force owners to pay more because they cannot refinance.

Now you can see, a lot of people have no chance of refinancing now.. With TDSR and the maximum year tenure, you will have no chance of refinancing and have to stick to the original loan package. You will have no chance of changing your package or bank and will be at the mercy of the banks.

Now that HDB have given BTO to even second timers.. This will mean a lot of people will have to sell existing unit (HDB or PC) when BTO reach TOP.. And look at the amount of EC, mostly are upgraders. This will mean a lot of them will have to sell exiting unit (HDB or PC) when the EC reach TOP.. So for the next few years as more and more BTO and EC TOP, you can really see a lot of unit out for fire sales which I think will be mostly HDB.. HDB resales market will be turning ugly...

And they kill off most of the demand for the resale HDB, single able to get BTO, PR have to wait 3 years to buy HDB, first time couple all getting BTO easily now, so they can forget about resale market..

For the remaining demand, CM such as maximum of tenure of 25 years, MSR of 30% really limit the price of the HDB that one can buy as they cannot loan much now..

[oops]

There is always bad n good times when buying private properties. Never heard of any sellers ask for cooling measure in a bull markets..

[Dragonfly]

Now you can see, a lot of people have no chance of refinancing now.. With TDSR and the maximum year tenure, you will have no chance of refinancing and have to stick to the original loan package. You will have no chance of changing your package or bank and will be at the mercy of the banks.

Now that HDB have given BTO to even second timers.. This will mean a lot of people will have to sell existing unit (HDB or PC) when BTO reach TOP.. And look at the amount of EC, mostly are upgraders. This will mean a lot of them will have to sell exiting unit (HDB or PC) when the EC reach TOP.. So for the next few years as more and more BTO and EC TOP, you can really see a lot of unit out for fire sales which I think will be mostly HDB.. HDB resales market will be turning ugly...

And they kill off most of the demand for the resale HDB, single able to get BTO, PR have to wait 3 years to buy HDB, first time couple all getting BTO easily now, so they can forget about resale market..

For the remaining demand, CM such as maximum of tenure of 25 years, MSR of 30% really limit the price of the HDB that one can buy as they cannot loan much now..

I fully agree. Most PC owners will hold on to their properties since the cost of replacement is so high with all the Buyer/ seller tax etc. But when they hold on their properties, they are at the mercy of the banks since refinancing is so tough at today's environment.
Govt will remove CMs eventually but no so soon. CM should apply to HDB and perhaps remove some CMs for PC since it is private.

[fiat500]

Next election they might lose a few more seats!
Many frustrated investors, genuine buyers n sellers out there directly affected by all these cm..

[mosaic]

Next election they might lose a few more seats!
Many frustrated investors, genuine buyers n sellers out there directly affected by all these cm..

i doubt so. Remember one of the major bugbears for the last election was rising property prices. Now the government has effectively stemmed it. Private property owners only consist of what 20%? And nobody s going to give a hoot about frustrated investors. Caveat emptor.

Actually if you ask me i m glad hdb resale prices are coming down. As i ve said many times, hdbs are meant to be just a basic roof over your head, not a speculative tool. One cannot buy a hdb assuming prices will only go up and confirm guarantee upgrade on MOP. Its just wrong.

[focus]

I would want them to relax the TDSR and Loan tenure to benefit those in their 40s onwards who want to downgrade or swap to another property using at least 30yrs loan.

But if they do that, the property market have no chance of cooling. it will come back alive again. lol.

[mosaic]

I would want them to relax the TDSR and Loan tenure to benefit those in their 40s onwards who want to downgrade or swap to another property using at least 30yrs loan.

But if they do that, the property market have no chance of cooling. it will come back alive again. lol.

you re right. There s simply too much liquidity on the sidelines. Once the CMs are lifted people will chiong in. They re using "simple" economic measures in this case. There will come a time when it will be ok to lift the measures. But the time is not now

[oops]

MSR/ TDSR will be the tools govt use to bring down prices. This would benefit the buyers. Past few yrs sellers had been sitting on huge gain.

[akow]

Who is this Getty Goh ?

He was from MINDEF