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Thread: Too soon to ease property curbs, says Khaw

  1. #1
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    Default Too soon to ease property curbs, says Khaw

    http://www.straitstimes.com/archive/...-khaw-20140805

    Too soon to ease property curbs, says Khaw

    Published on Aug 5, 2014 1:18 AM

    By Janice Heng


    NATIONAL Development Minister Khaw Boon Wan yesterday turned down an MP's call to relax some of the property cooling measures, saying such a move could raise demand and, in turn, housing prices.

    Ms Foo Mee Har (West Coast GRC) wanted the Government to consider easing some rules like the Additional Buyer's Stamp Duty (ABSD) so that Singaporeans can upgrade their properties while staying financially prudent.

    But Mr Khaw believes it is too early to loosen the rules.

    "Such a move could lead to an upswing in demand, which would increase the number of transactions and raise housing prices," he told Parliament as he restated the Government's position.

    "This would not be welcome to Singaporean home buyers, particularly those with aspirations to upgrade."

    Singaporeans who buy a second property, without selling their first home, have to pay 7 per cent ABSD on their new purchase and 10 per cent on subsequent ones.

    Foreigners pay 15 per cent ABSD on any residential purchase, while permanent residents pay 5 per cent on the first property and 10 per cent on subsequent ones.

    But home prices have yet to budge significantly.

    As a result, the Government stated twice in the last two months that the cooling measures will stay: the National Development Ministry at the end of June, and the Monetary Authority of Singapore's managing director Ravi Menon last month.

    Mr Menon said prices remain high, having risen 60 per cent in the last four years and fallen by just 3.3 per cent in the last three quarters.

    Latest figures show that in the second quarter of this year, private property prices fell 1 per cent while public housing resale prices fell 1.4 per cent.

    In his reply, Mr Khaw also said the cooling measures are to keep the housing market stable and sustainable. "They aim to encourage financial prudence among home buyers and to moderate property prices."

    The measures include lowering the proportion of income that can be used to pay a home loan.

    He also said there are concessions to benefit upgraders. For example, Singaporean married couples can get an ABSD refund if they sell their existing home within a stipulated period after buying their second home.

    Similarly, an upgrader, who provides documents to his bank to show he will be selling his existing home, will be treated as a borrower with no outstanding home loans. This lets him qualify for the maximum loan-to-value ratio of 80 per cent. In other words, his new loan can cover 80 per cent of the value of the purchase.

    "The existing concessions are reasonable and sufficient," concluded Mr Khaw.

    "Any move to relax the cooling measures, including by broadening these concessions, is premature under current market conditions."

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  2. #2
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    Default Premature to lift property cooling measures, says Khaw Boon Wan

    http://www.businesstimes.com.sg/arch...n-wan-20140805

    Published August 05, 2014

    YESTERDAY IN PARLIAMENT

    Premature to lift property cooling measures, says Khaw Boon Wan

    By Lynette Khoo

    [email protected] @LynetteKhooBT


    [SINGAPORE] Minister for National Development Khaw Boon Wan reiterated yesterday in parliament that it is premature to relax property cooling measures given the current market conditions.

    Lifting the measures now could, in fact, lead to an upswing in demand, hence raising the number of transactions and housing prices.

    Mr Khaw was responding to a question from Member of Parliament Foo Mee Har on whether the government will consider relaxing some property cooling measures, such as those relating to the Additional Buyer's Stamp Duty (ABSD), so that Singaporeans who meet the total debt servicing ratio (TDSR) of 60 per cent can upgrade their properties while remaining financially prudent.

    The ABSD was introduced in December 2011, with the rates subsequently raised. Since January 2013, Singapore citizens who already own one residential property would have to pay ABSD of 7 per cent when they purchase a second one. Those with two or more existing residential properties would have to pay ABSD of 10 per cent on their next purchase.

    Singapore permanent residents would have to pay an ABSD of 5 per cent for their first residential property purchase or 10 per cent if they already own one or more residential properties. Foreign residents and non-individuals would have to pay an ABSD of 15 per cent when they purchase any residential property.

    Residential prices started to correct only in the third quarter of last year after the TDSR was introduced.

    Mr Khaw pointed out that various concessions are already in place to benefit upgraders. For example, married Singaporean couples can enjoy a refund on ABSD if they sell their existing home within a stipulated period after the purchase of their second home.

    Similarly, an upgrader may qualify for the highest loan-to-value limit of 80 per cent on his second loan if he is able to provide documents to his bank to show that he will be selling his existing home. This enables him to be treated as a borrower with no outstanding housing loans.

    "The existing concessions are reasonable and sufficient," Mr Khaw told the House. "Any move to relax the cooling measures, including by broadening these concessions, is premature under current market conditions."

    He added that the cooling measures are "intended to keep Singapore's market stable and sustainable" by encouraging financial prudence among home-buyers and moderate property prices.

    Many market watchers have echoed the view that it is too early for the government to lift its cooling measures. Some believe that the government is comfortable with a 10-15 per cent decline in residential property prices over the next two years, which translates to about 1.5 per cent drop in prices every quarter.

    Song Seng Wun, executive director and regional economist at CIMB Research, noted that Asia is still in net liquidity position and much liquidity is waiting on the sidelines.

    He reckoned that the government will not lift its property cooling measures before the US Federal Reserve raises interest rates.

  3. #3
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    Roll back property cooling measures is quite too early. Does it mean that the home sales will decreased but the prices will remain stable? I can feel its effect since just recent I have bought a unit at highline residences condo ( http://www.propertylaunchgallery.com...ne-residences/ ). Indeed they need to ramped up the HBD flats to meet the people's demand.

  4. #4
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    Quote Originally Posted by KimChiu View Post
    Roll back property cooling measures is quite too early. Does it mean that the home sales will decreased but the prices will remain stable? I can feel its effect since just recent I have bought a unit at highline residences condo ( http://www.propertylaunchgallery.com...ne-residences/ ). Indeed they need to ramped up the HBD flats to meet the people's demand.
    Are u an agent?
    since when is highline residence launched? Please dont give misleading information.

  5. #5
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    Quote Originally Posted by august View Post
    Are u an agent?
    since when is highline residence launched? Please dont give misleading information.
    it's quite obvious. lol
    Ong lai ah!

  6. #6
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    1) Can complain to CEA?

    2) both the intelligence level and ethics are at question here.

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