Govt raises ABSD, tightens LTV limits to cool Singapore property market

[CY09]

A lot of developers will be selling unsold units to their entities but this time, instead of paying 15%, they will be paying 25%.

While it is a good move, I would have loved if the government had also increased the qualifying certificate extension quantum as well - perhaps 6% more for each tranche.

The problem is that the developers who are bidding up these properties are mainly from Asian Economies who are currently doing their own forms of monetary easing. So it is better to hit them hard so that when their central banks tighten up, we will not be hit by the contagion.

[Dividend Warrior]

Just a quick question guys. Why are the cooling measures positive for Reits? 
Many reits performed strongly on Friday.

[touzi]

The cooling measure is for residential properties so Reits are not affected. Maybe because of that it is considered as good news, relatively.

[BlueKelah]

It is quite obvious now all the policies are sharping up for 'one household to one property'.

Also, if you remember early last year, some developer escaped paying QC charges after an entity bought their unsold units at a bulk sale. I believe that move is still fresh in govt's memory.

It's a loophole in the rules being exploited by developers so no surprise gov really bringing down the hammer this time round.

[BlueKelah]

The cooling measure is for residential properties so Reits are not affected. Maybe because of that it is considered as good news, relatively.

Could be reallocation by property funds to reits