New property cooling measures announced

how do they check pr did not sublet their flats?

PR can just lock up one room , the old usual trick .

the Singapore version of subprime probably would be the result of higher mortgage interest rate.

If that happens, wonder whether MAS will depreciate SGD to save the property market and let inflation fly or MAS will stay put and let a lot of property owners suffer.

Be prepared.

In the low interest rate environment with inflation higher than fixed deposite rate, cash rich iSngaporeans and PRs need an avenue to generate higher return. What could they do? I think they would buy properties overseas or invest in high-dividend yield stocks; that may explain why REITS and high-yield stocks have been doing well.

(12-01-2013, 12:24 AM)freedom Wrote: the Singapore version of subprime probably would be the result of higher mortgage interest rate.

If that happens, wonder whether MAS will depreciate SGD to save the property market and let inflation fly or MAS will stay put and let a lot of property owners suffer.

Be prepared.

didn't u read what the minister said:" the reality of today environment has been persistent ultra-low interest"...
i doubt yr day will ever come

---

(12-01-2013, 12:10 AM)cfa Wrote: PR can just lock up one room , the old usual trick .

oh, isn't tt LPPL?

(12-01-2013, 07:22 AM)pianist Wrote:

(12-01-2013, 12:24 AM)freedom Wrote: the Singapore version of subprime probably would be the result of higher mortgage interest rate.

If that happens, wonder whether MAS will depreciate SGD to save the property market and let inflation fly or MAS will stay put and let a lot of property owners suffer.

Be prepared.

didn't u read what the minister said:" the reality of today environment has been persistent ultra-low interest"...
i doubt yr day will ever come

I still remember the golden age talk from someone very high, so what happened after that?

(12-01-2013, 07:59 AM)freedom Wrote:

(12-01-2013, 07:22 AM)pianist Wrote:

(12-01-2013, 12:24 AM)freedom Wrote: the Singapore version of subprime probably would be the result of higher mortgage interest rate.

If that happens, wonder whether MAS will depreciate SGD to save the property market and let inflation fly or MAS will stay put and let a lot of property owners suffer.

Be prepared.

didn't u read what the minister said:" the reality of today environment has been persistent ultra-low interest"...
i doubt yr day will ever come

I still remember the golden age talk from someone very high, so what happened after that?

i see..do u mean 'swiss standard of living"?
i am guessing, if the MP sex scandal didn't surface, dunno if this measure will appear. it seems to time closely with the impending by-election.
after fielding a punggol borned doctor (now stays at city fringe), then comes this measure..let hope for more goodies.

Some S'poreans are renting HDB flats from PRs while waiting for their own, what a joke .

Frankly after so many rounds of ineffective cooling measures, i seriously doubt their capability to manage housing.
Why need to go through so many rounds ? If they have nip the problem in the bud, things will be much easier to manage.

Just to highlight some observations not yet commented on:

o Mortgage Service Ratio to be capped at 30% of a borrower's gross monthly income if loan is from financial institution ==> a couple with monthly income of $12K taking a 30 year loan @ 1.23% (lowest rate I could find) can borrow a maximum of $1.1M.

o EC to have a maximum strata floor area of not more than $1,722 sq ft ==> a maximum EC price of $1.2M @ $700 psf (about what I think is the current market asking price).

The difference between the two is about the size of the minimum down-payment.

o Developers of future EC sites from Government Land Sales can sell units only 15 months from the award of the site or after completion of foundation works, whichever is first ==> developers can no longer "flip" ECs and are now exposed to demand and (indirectly) to interest rate risks.

The implication is that EC prices are now effectively capped from the demand side, made more risky from the supply side and developers should, if rational, bid more cautiously for future EC land tenders.

The implication for us at valuebuddies is that stock prices of EC developers have just gotten a lot more interesting.

One last point regarding "persistent ultra-low interest rates". Even though we are mainly fundamental rather than technical investors, and equity rather than bond investors, and local Singapore rather than US Market focused, I believe that it does pay to keep an open mind and read widely. So the following two links are for your reading pleasure:

o An Unhappy New Year for Bonds ( see http://online.barrons.com/article/SB5000...10692.html )

o A Big Crack in the Bond Story (see the Getting Technical Column in the latest issue of The Edge magazine)

P.S.: I do believe in Freudian Psychology. So when a Minister goes out of his way to categorically state that "we are not intending to engineer a market crash" when announcing a "tsunami" of property cooling measures, I draw the opposite conclusion.

P.P.S.: I currently do NOT own a house and am renting my place so I do have an interest in a housing crash.