Singapore Government Announced Property Cooling Measures

[Dennis Ng]

I wonder how the govt gonna do the background check on overseas properties... I believe govt do not have complete access to that information..

yes, difficult to check. Possibly require them to make a declaration that they do NOT own a property in their home country.

[ktys]

I am also wondering those who currently stays in HDB and already own private properties. If their existing HDB gets enblocked, they cannot buy a new flat from HDB; without selling away their private property?

[Dennis Ng]

I am also wondering those who currently stays in HDB and already own private properties. If their existing HDB gets enblocked, they cannot buy a new flat from HDB; without selling away their private property?

this is interesting. I think may need to check, even though strictly reading the announcement is cannot, but in this case, the "sale" is forced upon the owner through the SERs (Selective En-bloc Redevelopment Scheme), not chosen by him/her.

[dreamslink]

How about HDB upgrade? Let say I bought HDB 4-Room first then private property. In future if want I upgrade my HDB 4-Room to 5 Room, do I still have to sell my private property?

[Dennis Ng]

How about HDB upgrade? Let say I bought HDB 4-Room first then private property. In future if want I upgrade my HDB 4-Room to 5 Room, do I still have to sell my private property?

yup.

[mch05]

I am also wondering those who currently stays in HDB and already own private properties. If their existing HDB gets enblocked, they cannot buy a new flat from HDB; without selling away their private property?

this is interesting. I think may need to check, even though strictly reading the announcement is cannot, but in this case, the "sale" is forced upon the owner through the SERs (Selective En-bloc Redevelopment Scheme), not chosen by him/her.

I thought I had read in one a Sunday Times article that the unfortunate owner will also be adversely affected by such a situation. I guess you can try and appeal and hope for the best.

[lootster]

HDB sellers lower cash premiums
Sep 13, 2010 - PropertyGuru.com.sg

The recently implemented property cooling measures have resulted in a lower number of resale apartment sellers asking for high premiums.

Property agents have seen many owners lowering their cash-over-valuation (COV) quotes, particularly when they asked for over $60,000 originally, while other owners are demanding less to draw buyers.

Mr. Albert Lu, managing director of C&H Realty, noticed that some clients have cut back their asking COVs by up to $10,000. Some clients tend to be serious sellers, especially those who have already acquired a new house and need to move, said Mr. Lu.

There are also cases that those who reside near MRT stations were using the location to pull in high cash premiums, at around $50,000 to $60,000. Now that the property market has slacked slightly, “they are more willing to drop the COVs,” added Mr. Lu.

Mr. Jeffrey Hong, executive director at HSR observed that apartment owners asking for “ridiculously high” COVs have become more practical. These properties seem to be in coveted locations such as Marine Parade, with asking COVs of between $60,000 and $80,000.

Mr. Hong, however, stressed that those sellers who were asking for reasonable levels of COV at $30,000 to $40,000 have kept on their demands.

According to Mr. Chris Koh, director of Dennis Wee Group, sellers have become realistic since they realise that customers are not rushing into the market.

“We are educating owners: if the price offered is good, take it,” said Mr. Koh. “If you call for such a high COV, nobody will even want to come and look (at your flat).”

[Starfire]

Hi Dennis,
The Government imposed in February 2010 a seller’s stamp duty (SSD) for sellers who buy residential properties3 on or after 20 February 2010 and sell them within a year of purchase.

Will I be affected by the above ruling if the date i sign my OTP on 15 Jan 2010 and my house completion date was 26 April 2010 ? Please help advise. Thanks

[Dennis Ng]

Hi Dennis,
The Government imposed in February 2010 a seller’s stamp duty (SSD) for sellers who buy residential properties on or after 20 February 2010 and sell them within a year of purchase.

Will I be affected by the above ruling if the date i sign my OTP on 15 Jan 2010 and my house completion date was 26 April 2010 ? Please help advise. Thanks

Hi Starfire,

you should not be affected, if you exercised the Option to Purchase on 15 Jan 2010, before 20 Feb 2010, the effective commencement date.


19 Feb 2010 - government announced anti-speculative measures to cool down property market, to take effect on 20 Feb 2010.

Seller's Stamp Duty (SSD) on Residential Properties Sold within 1 Year

8. The SSD will be levied on sellers of residential properties and lands [3] bought on or after 20 Feb 2010, and sold within one year from the date of purchase [4]. Properties bought before 20 Feb 2010 will not be subject to the SSD.

9. The objective of this new tax measure 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.

10. The SSD will be applied at the standard ad valorem stamp duty rates [5] for the conveyance, assignment or transfer of property: 1% for the first $180,000 of the consideration, 2% for the next $180,000, and 3% for the balance.

11. The SSD will not be applicable to HDB flats as they are already subject to a minimum occupation period of at least one year [6].

12. IRAS will be releasing an e-tax guide on the circumstances under which SSD will apply and the procedures for paying SSD. The e-tax guide will be available at www.iras.gov.sg. Taxpayers with enquiries may call IRAS at 6351 3697 or 6351 3698. The telephone lines will be opened till 6.30 pm on 19 February 2010 and from 8.30am to 1.00 pm on 20 February 2010.

[4] The date of purchase for computation of the holding period for SSD shall be the date when a buyer (i.e. Buyer A) exercises the option to purchase the property, or signs the sale and purchase agreement, whichever is earlier.

The date of resale of the property shall be the date when the subsequent buyer (i.e. Buyer B) exercises the option to purchase the property from Buyer A, or signs the sale and purchase agreement, whichever is earlier.

[Starfire]

Thanks Dennis for the information.

[djwongdj]

Minister Tharman Shanmugaratnam mentions that further property cooling measures are unlikely for the time being...effectively putting the brakes on more surprisingly sudden changes of property ruling.

Mah Bow Tan will have the Finance Minister to thank if he gets re-elected this coming election...although a prominent cabinet portfolio may be another matter altogether...LOL!!!

[yapeuweng]

‘Stay out of property market for now’
By MoneyMatters.sg | Property Blog – Tue, Jun 7, 2011

Our blogger advices Singaporeans to stay out of the property market for now.

This article can be found here:
http://sg.news.yahoo.com/blogs/property ... 08511.html

Roman Abramovich, a Russian billionaire and the 53rd richest person according to 2011 Forbes list, said: "investors have very short memories". In today's bullish climate it is hard to imagine that just about two years ago, there were genuine fears of a global financial meltdown. These days we are no longer concerned about our assets becoming worthless; instead we are more concerned about property prices escalating beyond what we can afford.

In view of this, some people may inevitably believe that this current "bull" run will last forever and make risky investments in fear of losing out. They attempt to rationalise that it is different this time round and that the spectacular market performance is due to the emergence of Asia as a new financial powerhouse.

John Templeton, a very prominent stock investor once commented," the four most dangerous words in investing are 'This time it's different'." According to the historical URA Private Property Price Index (PPPI), we can tell that the property market is cyclical and no trend lasts forever. In a blog post I wrote in July 2009, I mentioned then that the property market will not remain depressed indefinitely. In a similar vein, I am confident that the current price appreciation will not go unabated and it will correct in the near future.

The question is how can we tell when the Singapore property market is going to dip?

In my second book entitled Buy RIGHT Property — Taking the R.I.G.H.T. Approach to Property Investing in Singapore, I shared that my company has developed a proprietary index called the Ascendant Assets Index (AAI).


The basic premises of the AAI are (1) there is a lead-lag relationship between the stock and property market and (2) we are able to tell how the property market is performing by analysing the correlation between the stock and property market. For example, in bullish (or bearish) market conditions, we would expect the correlation between the stock and property market to be high as prices are increasing (or decreasing) in tandem. On the other hand, we would expect the correlation between the stock and property markets to be low during turning points as stock prices, being more liquid, would diverge from the less responsive property prices.

So how is the market like now? Figure 1 shows the AAI for the recent quarter 2011Q1. From the figure, we can tell that the Singapore property market (shown in green colour) is presently in the strong growth stage with both STI and URA PPPI increasing in tandem. However, it is noteworthy that the AAI has dropped from over 90% to under 80%. Over the next few quarters, we expect the AAI to drop further. When the AAI falls below the 50% mark (represented by the dotted line), it signals a turning point as the stock market will be almost completely out of sync with the property market. It signals an overall change in underlying market sentiments and the property market would be expected to decline shortly after.

Figure 1: Ascendant Assets Indicator (2011Q1)

Conclusion

It is important to note that the AAI is only one tool to gauge how the property market is performing. There are other aspects to consider before making a buy or sell decision. Nonetheless, I have been asked by several prospective clients if it is a good time to buy properties. My personal view is that unless it is an essential purchase (e.g. buying a home to stay), I would stay out of the market right now. In fact, I had recently sold two properties to accumulate cash to prepare for the next market downturn.

As a parting shot, let me leave you with a quote by Warren Buffett that I often make reference to, "We simply attempt to be fearful when others are greedy and to be greedy when others are fearful". With the URA PPPI reaching a new peak in the last quarter, I can't help but to feel a slight sense of fear…

By Getty Goh, Director of Ascendant Assets, a real estate research and investment consultancy firm. Posted via www.Propwise.sg, a Singapore property blog dedicated to helping you understand the real estate market and make better decisions.

[Dennis Ng]

huge supply of condos completing in year 2013 and 2014...

URA information on future property supply which Developers and Property Agents might NOT want you to know is here: http://www.ura.gov.sg/pr/text/2011/pr11-135.html

Singapore property prices might fall by 10% to 30% by year 2013...

people buying properties hoping to sell at a profit in year 2014 may need to pray very hard...

the next Global Financial Crisis is likely to be Deeper and more prolonged...

it might come in year 2012 and drag on till year 2014...

Is S$1,200 psf for suburban condos considered Reasonable Price? It's a "standard price" currently, but prices are NOT stagnant and can go up or down according to market sentiments.

Rental rates might fall by 30% and Interest rates on Housing Loans might spike up from 1% to 3% in year 2013...

Hope people are prepared for such possibilities before they invest into properties now.

Actually I own http://www.HousingLoanSG.com/ , I should saying positive things about property if I'm interested in my own Business Interests.

However, the only guide to what I say is my Conscience, nothing else really matters to me.

Money cannot buy me, not even during years of struggle when I was NOT rich then.

Now that I'm financially free, the more I will NOT let financial interests affect what I say.

Extracted from the link above: As at the end of 3rd Quarter 2011, there was a total supply of 76,255 uncompleted private residential units from projects in the pipeline6, higher than the 71,111 units in 2nd Quarter 20117 (see Annexes E-1 & E-28). The pipeline supply of 76,255 units was the highest ever recorded since such data was first available in 1999.

Of the supply in the pipeline, 39,111 units remained unsold as at 3rd Quarter 2011.

Why not property agent provide the above URA supply of Residential properties as part of their Brochures to potential customers at NEW Property Launch?

If Property Agent is really keen on serving clients' interests, this is relevant information for ALL potential buyers of property, isn't it so?

Property market very hot?

URA says there are 39,111 units remained unsold as at 3rd Quarter 2011. Should NOT property agents tell their potential customers this information as well?

[ngtfook]

"cooling" measure by SG and HK govt...

RayNg

Another "cooling" measure by govt...

This will eliminate the "blank cheque" advance purchase order by developer/agent as seen in the lastest Bedok Resident sales.


URA working on new rules

Changes are afoot that might give prospective home buyers more confidence in their purchase.

The Straits Times reported that the Urban Redevelopment Authority (URA) is working on new rules, ranging from showflat dimensions to the problems of pressure selling and misleading advertisements.

With the proposed changes, information about units will be more accessible, minus the distracting marketing gimmicks.

For instance, showflats will need to have the same floor area and floor-to-ceiling height in order to accurately depict actual units. Removed walls, partitions, or doors will need to be marked to indicate their position.

The paper also reported that 'the floor area of rooms in a new unit, from balconies to bedrooms and the dining area, will also have to be accurately outlined'.

Developers will also have to provide the price list for units to be launched at least two days before the first option to purchase is issued.

Those who violate these and other regulations may be named by the URA, with the list posted on its website. The maximum penalty, license suspension, may be meted out to those who consistenly flout the rules.

URA will announce the implementation date after refining the details in consultation with the industry.

Hong Kong proposes law on new-home sales


Look like SG govt is following HK govt.....

RayNg

-----------------------------


Developers who mislead buyers may be slapped with fines or jail terms. -Reuters

Tue, Nov 29, 2011
Reuters

HONG KONG - Hong Kong has proposed a new law that will slap fines and jail terms on developers that mislead buyers of new homes.

The government on Tuesday kicked off a two-month consultation period on the new law, which it hopes to introduce to the Legislative Council in the first quarter of next year.

"There are consumer protections on other areas, and there should be similar protections on selling properties," Eva Cheng, the secretary for transport and housing, said as she called for improved transparency, as she unveiled the proposed law. "It has to be done, and there is never a better time."

Cheng said the current slump in property prices in Hong Kong does not affect the government's motivation to put new rules in place. A steering committee has been working on the rule changes over the past year. The new law would govern all first-hand projects, whether completed or sold off-plan.

The maximum penalty for misleading the public would be a fine of HK$5 million (S$833,200) and seven years in prison. Minor breaches would be punished by a fine of around HK$100,000.

Under the proposed rules, developers would have to make a sales brochure on each property available at least seven days before sales begin. The brochure would list the property's address and the neighborhood it is in.

The brochure would also have to provide the saleable area of the property, and would not be allowed to contain artist's impressions of the development.

Residential property in Hong Kong has traditionally been priced and promoted based on gross floor area, not the net area.

But consumers have complained about misleading practices from developers, who often include an apportionment of public areas such as lift lobbies, electricity plants and clubhouses in the gross floor area of a flat.

Cheng admitted current legislation on new-home sales is insufficient.

"We agree the current measures are not sufficient," Cheng said, adding that the new rules are a top priority for her bureau in the coming year. "The public is rightly concerned about the sale of first-hand properties," she said.

The saleable area is the floor area of the residential property itself, including any verandah or utility platform, but excluding bay windows and public parts of a development.

Developers would also be required to provide a price list for the development at least three calendar days before it goes on sale.
With the government cracking down on property speculation in Hong Kong, transactions have stalled and prices weakened.

Edward Farrelly, the director of research for Hong Kong, Macau and Taiwan at brokerage CBRE, expects residential prices to fall 20 per cent over the next year.

The new rules will have an impact, he said. "I think there's a lot of good in getting more transparency into the market," he said. "It remains to be seen how the secondary market responds."

New home prices will likely rise as a result of developers building extra costs into their baseline price, Farrelly said. But they may not be able to push through that kind of increase in the current market.

"Developers will try to resist a major hit on their margin,"Farrelly said. "However, if the market is faced with a downturn, they may have to accept lower margins."

Andrew Lawrence, the Hong Kong property analyst at Barclays Capital, has forecast a decline of 25 to 30 per cent in Hong Kong property prices, assuming the former British colony pulls off a soft landing. The drop would rise to 35 to 45 per cent in case of a hard landing, Lawrence predicts.

His favorite pick in the sector is Cheung Kong, run by Hong Kong tycoon Li Ka-shing, since the company has been deleveraging its balance sheet over the last 24 months. That should allow it to buy assets at the bottom of the cycle, Lawrence said. Cheung Kong is Hong Kong's second-largest developer by market capitalisation, behind Sun Hung Kai Properties.

By contrast, Sun Hung Kai, the world's second-biggest developer by market capitalisation, is relatively highly geared, Lawrence said. It and Henderson Land have the potential to need to issue fresh equity in the future, he said.

[Dennis Ng]

in the next 12 months or so, there will be several rounds of further downward revision of Economic Growth rate in Singapore, especially when the Global Financial Crisis hit us in year 2012...

So year 2012, Singapore economic growth rate in my opinion can be as low as 1% or even lower, instead of 3% (as forecasted currently).

Singapore property prices likely to start heading lower end 2012...especially with the looming huge supply of HDB flats and condos coming in year 2013 and year 2014... http://www.masteryourfinance.com/forum/ ... 7431#17431