New property cooling measures announced

Fresh from the oven! 7th round of cooling measures announced.

Straits Times
New property cooling measures announced
Published on Jan 11, 2013
6:24 PM

Significant new property cooling measures have been announced.

They include size restrictions on executive condominiums, tighter loan-to-valuations and higher buyer stamp duty.

The Government is also implementing a seller's stamp duty on industrial property for the first time to discourage speculative activity in the sector.

Key changes:
- Additional Buyer's Stamp Duty will be raised between five and seven percentage points across the board. To be imposed on PRs purchasing their first residential property and on Singaporeans purchasing their second property. The Government said the ABSD measures are significant but temporary and will be reviewed in future depending on market conditions.

- Individuals obtaining a second housing loan, the LTV limits will be lowered to 50 per cent, or 30 per cent if the loan tenure exceeds 30 years. For individuals obtaining third or subsequent housing loans, LTV will be 40 per cent or 20 per cent if tenure exceeds 30 years. For non-individual borrowers, LTV will be lowered to 20 per cent, from 40 per cent before.

- Minimum cash down payment for individuals who are applying for a second or subsequent housing loan will also be raised from 10 per cent to 25 per cent.

- PRs who own HDB flats will be disallowed for subletting their whole flat

- Max strata floor area for new EC units to be capped to 160 sq m

- Sales of new dual-key EC units will be restricted to multi-generational families only.

- New sellers stamp duty for industrial property of between 5 per cent and 15 per cent, depending on when it is sold.

This is the seventh round of cooling measures announced by the Government since 2009 and its the most comprehensive set of measures so far.

Quote:PRs who own HDB flats will be disallowed for subletting their whole flat

The govt should impose PR to sell their apt when they leave SG.

press release and full details here.

EC get their due treatment too!

http://www.channelnewsasia.com/annex/Joi...%2013).pdf

Reminds me of this headline

"High Costs, But Minor Long-Term Economic Impact"

http://www.huffingtonpost.com/mobileweb/...42820.html

I sincerely hope the 7th round works since the first 6th rounds seem couldn't.

Anyway 2 loopholes I see in it.
1. PR not allowed to sublet whole flat. Well, sublet every single room except living rooms then.
Beats not able to sublet at all. Besides HDB can't check every nook and corner.
Give a whistle blowing system with rewards, that might do the trick.

2. Individuals buying 2nd property above need to pay higher cash downpayment + lower LTV.
No worries, rich papas will be able to help their sons get one.
The richer ones with more kids will have more opportunities to buy than the aspiring to be rich property investors.
Social classes divergence widens further.

While the INTENT of the policies is good, to ensure sustainability of properties and ensure not too much bankruptucy during downturn, the loopholes are there and cannot be closed off easily unless true communism method of price ceiling is imposed.

The implementation of seller stamp duty on industrial property is good though. Ever hear how industrial property agents tell you about the techniques to avoid URA rules and regulations? LOL.
The economic viability of Singapore depends partly on its manufacturing. We are also a transit hub afterall.
Industrial property prices cannot rise too high else it will strangle our nation's economic competitiveness.

Gov is the biggest land supplier , do you think they hope their lands worth less ?

the problem is too many singaporeans are vested in the property market now, government included. a crash would wipe out too much. best we can hope for and I think the intention is to put brakes and parachute, go for gradually stop / plateau. stability would be a overriding consideration.

HDB resale will be affected.

Good for rental market

Good for Iskander project...but I always warn them, JB or KL is a big risk, sleeping tiger wake up anyhow bite, S'porean seen to forgotten Clob & 513.....

Property and bank stocks will be hardest hit next Monday.

Prices have overshot fundamentals. URA PPI has outstripped median wage growth. Not sustainable so a correction would be healthy.