Measures to cool property market needed to avoid drastic measures
February 24, 2010
SINGAPORE : There may be no property bubble yet, but Prime Minister Lee Hsien Loong on Sunday said recent moves to curb speculation were necessary to avoid more drastic action later on.
Packed showrooms and fast-rising prices have become a concern for authorities, who introduced new measures on Friday to cool the property market before things got out of hand.
A Seller’s Stamp Duty is imposed on all residential properties sold within one year of purchase, while loans from financial institutions are capped at 80 per cent.
At a Lunar New Year dinner at Teck Ghee in his constituency of Ang Mo Kio, Mr Lee said that while the government cannot control property prices, it can ensure prices remain affordable.
Mr Lee said: “Please take good care of it. Do not think of selling it prematurely, or making a quick buck. Because if you sell it and you can’t find another house to stay or you do not have a nest egg for your old age, that is big trouble.”
Mr Lee said that one’s home is a long-term investment, whether as a buffer against old age, or to be passed on to one’s children or grandchildren.
But this brought him to another concern - that Singaporeans are not reproducing enough.
Mr Lee noted that Singapore’s low birth rate is a reflection of fundamental changes taking place across Asia.
The Total Fertility Rate fell to 1.23 last year - with the rate among Chinese Singaporeans even lower at 1.09.
In China for instance, some young adults even advertise for make-believe girlfriends and boyfriends to hold off family pressure over the Lunar New Year.
Mr Lee said: “It is amusing but it is also sad. I am relieved that I have not heard of any reports of boyfriends or girlfriends for rent in Singapore. I hope it does not happen. But I know that young people do feel some pressure.”
Mr Lee added that some social pressure may be useful, but it is family support that will give young Singaporeans a nudge in the right direction.
Source: Channelnewsasia.com
Government announces 2 measures to cool property market
February 24, 2010
SINGAPORE: The Government has introduced two new measures to cool the property market and pre-empt a bubble from forming in the private homes sector. They come into effect Saturday.
The Ministry of National Development said this will help ensure a stable and sustainable property market, and to curtail the HDB resale market where prices tend to track private property movements.
From Saturday, it will be more difficult and expensive for speculators to own and flip properties. A Seller’s Stamp Duty will be imposed on all residential properties and residential land bought after Friday, and sold within one year from the date of purchase.
The housing loan limit will also be capped at 80 per cent - down from the current 90 per cent.
This new loan limit will apply to all housing loans granted by financial institutions for private homes, executive condominiums, HUDC flats and HDB flats, including those sold under the Design, Build and Sell Scheme. But loans granted by the Housing and Development Board (HDB) for flats, will still have a cap of 90 per cent.
Last September, the Government introduced anti-speculative measures to cool the private homes market. While these helped initially, there were signs the market was heating up again.
The new measures come as demand for private homes continues to soar. The number of units sold by developers in January was three times more than December. It was also the highest monthly total since September last year.
The Ministry said the objective of these measures is to discourage short-term speculative activity that could distort underlying prices. It is not targeted at the purchase of properties for owner occupation or longer term investment.
Market watchers said the measures are easiest to implement, without causing the market to come to a standstill.
Eugene Lim, associate director, ERA Asia Pacific said: “We are recovering. The economy is recovering and the market is picking up so what they want to do is to make sure the property market is moving up in tune together with the economy and not faster than the economic recovery.”
Analysts added that the prices and volume of private property homes are unlikely to be significantly impacted.
Donald Han, managing director, Cushman & Wakefield said: “It has got a fairly minimal impact to the market, mainly because a lot of investors from our records are buying for the medium term, at least for a period of two to three years.
“Some investors will probably stand by the sidelines and see how sales progress into February and March. It will take some wind out of the market; potentially it could be around 10-15 per cent in terms of the numbers of new home sales taken out of the equation.”
The Real Estate Developers’ Association of Singapore said the reduced mortgage cap is unlikely to have significant impact on genuine buyers and investors, as lending institutions have already been more prudent in the aftermath of the global financial crisis.
Source: Channelnewsasia.com