Press Statements on the new property measures

MND Press Statement

HDB Press Statement

Annex: Stamp Duty Calculation Examples

New government measures for the property market

THE Ministry of National Development (MND) announced on Monday several measures that would maintain a 'stable and sustainable' property market, that will take place with immediate effect.

In a statement issued on Monday morning, MND said it would increase the holding period for the imposition of Seller's Stamp Duty (SSD) on residential properties sold from one year to three years.

The SSD levied will vary according to the term of occupancy. If the property is sold in the first year of purchase, the full SSD will be levied - one per cent for the first $180,000 of the consideration, two per cent for the next $180,000, and three per cent for the balance. Two-thirds of the SSD will be levied for properties sold in the second year of occupancy and one-third for properties sold in the third year of occupancy.

The extended SSD will not affect HDB lessees as the required Minimum Occupation Period for HDB flats is at least 3 years.

For property buyers with outstanding housing loans, the Minimum Cash Payment has been increased from five per cent to ten per cent of the valuation limit. This measure is applied only to buyers of private residential properties, Executive Condominiums, HUDC flats and HDB flats (including those under the Design, Build and Sell Scheme) who are taking housing loans from MAS-regulated financial institutions who already have one or more outstanding housing loans.

For this group, the Loan-to-Value (LTV) limit has been lowered from 80 per cent to 70 per cent. Borrowers who do not have any outstanding housing loans will continue to have an LTV cap of 80 per cent. Loans granted by HDB for HDB flats (including DBSS flats) will still have an LTV cap of 90 per cent.

HDB loans are offered to eligible first-time flat buyers and second-timers who are right-sizing their flats to meet their housing needs. They are required to utilise all of their CPF Ordinary Account balance before HDB loans will be granted.

In their statement, the MND said lowering the LTV limit would 'send a clear signal' to financial institutions to maintain credit standards, and also encourage greater financial prudence.

HDB ups MOP for resale flats to 5 years

The Housing and Development Board (HDB) will increase the Minimum Occupation Period (MOP) of non-subsidised flats from three to five years.

Buyers of these flats will also be banned from concurrently owning both an HDB flat and a private residential property within the MOP.

Private property owners who buy a resale HDB flat must now dispose of their private residential property within six months from the date of flat purchase.

HDB said this will help ensure buyers purchase flats only when they have the intent of staying in it for long term and ensure equitable treatment for all flat lessees during their MOP.

Ownership of private properties by HDB lessees will be allowed after the MOP.

The changes will apply to resale applications received by HDB from Monday.

For the full article, please visit Channel News Asia at http://www.channelnewsasia.com/stories/singaporelocalnews/view/1077921/1/.html

CNA: New measures to cool property market

Channel News Asia: New measures to cool property market
By Mok Fei Fei | Posted: 30 August 2010 0824 hrs

	Photos 1 of 1 Home buyers at a property launch
	Related News • Special Report: 2010 National Day Rally

SINGAPORE: The government said Monday that it will increase the holding period for imposition of Seller's Stamp Duty (SSD).

The SSD will be raised from the current one year to three years.

Another measure will impact those who have more than one outstanding housing loan.

Property buyers who already have one or more outstanding housing loans at the time of the new housing purchase will have to pay more money upfront.

The government will increase the minimum cash payment from five per cent to 10 per cent of the valuation limit.

Those with more than one outstanding housing loan will also see a decrease in the Loan-to-Value (LTV) limit for housing loans granted by financial institutions regulated by MAS.

The LTV will be lowered from the current 80 per cent to 70 per cent.

The measures will take immediate effect on August 30.

The government said the objective of the measures is "to ensure a stable and sustainable property market where prices move in line with economic fundamentals".

It noted that the property market is currently very buoyant, with prices increasing by 11 per cent in the first half of this year.

It added that while Singapore has enjoyed strong economic growth in the first half, growth is expected to moderate in the second half of the year.

Should economic growth falter and the market correct, the government said property buyers could face capital losses.

It has thus decided to introduce additional measures now to temper sentiments and encourage greater financial prudence among property purchasers.

-CNA/wk

Flood campaigner's persistence pays off

Wow! I'm really impress with Dr. Audrey Tan's determined persistence and tireless efforts to get the authorities to do something to alleviate the flooding problem at Wilby Road beside the hard-hit condominium The Tessarina.

An article & photo featuring her valiant effort is featured in The Sunday Times 29 August 2010 front page.

Kudos to Dr. Audrey Tan!

TODAY: Enjoy the convenience of living in the CBD

Guys! Call me if you fancy owning/renting the SOHO-styled units at this exciting newly completed condominium. Many choice units available.


Enjoy the convenience of living in the CBD

Aug 27

Lumiere, BS Capital's latest residential property, welcomes high-flying executives who want the convenience of living in Singapore's Central Business District.

Located in the Shenton Way strip, the 45-storey development boasts 168 units. The freehold apartment complex consists of 33 studio units from 506 square feet each, 99 one-bedroom with study units from 624 sq ft each and 33 two-bedroom units from 969 sq ft each. The other three units are a penthouse and two duplexes.

The property sits on a site of about 15,000 sq ft. Facilities include an infinity pool, a jacuzzi, a tennis court, a basketball half-court, a floating gym and a sky garden on the 34th floor.

Lumiere is situated right behind Tanjong Pagar MRT Station and is a few minutes' walk from Marina Boulevard and Marina Bay Sands.

TODAY: The key to investing in homes

Totally in agreement with Colin, he usually have a rather neutral-bearish leanings in his articles.

Some points I would like to highlight:

• your own home should be treated as an investment, I know some who sold their home earlier this year thinking the market has topped and is now renting, facing a
The key to investing in homes

• timing is everything in life, the old adage that if you can hold it will eventually go up, remember '97, some properties are just recovering to that price right now! Its been a good 13 years, almost half the time of the tenure of the mortgage loan.

• when done right, rolling the proceeds forward and accumulating properties and generating cash flow is amazing. But done wrongly, leverage can kill. Double-edged sword that is very sharp. Know where you stand, your balance sheet, reserves etc learn from the banks in the financial crisis.

Enjoy the article...
by Colin Tan | Aug 27

Most of us have heard it all before from the experts. Investing in homes is one of the safest and surest forms of investment. If you cannot re-sell the property for a good profit within a couple of years, you can always hold it for the long term because it will always appreciate.

But if everyone follows this advice, will it still work? Surely it is a recipe for disaster. If everyone is going to earn it the easy way, who will do all the hard work?

Given today's price levels, the vast majority of Singaporeans who own their homes are sitting on large paper profits. Many are paper millionaires; for them to become real millionaires, they would have no roofs over their heads.

Nevertheless, it is hard to argue against such a track record. In fact, the earlier the property was purchased, the greater the capital appreciation.

Most of us have bought our homes to live in, rather than as a get-rich-quick investments. When you buy for owner occupation, you have a guaranteed tenant - yourself. Instead of rentals, you are paying monthly mortgage payments.

It is a vastly different scenario when you are buying for investment. You do not have a guaranteed occupier. If you are not able to sell your property before its completion, you will have to look for tenants.

You will need to look at the yields and compare that with other forms of investments. You will need to assess the overall housing demand-and-supply situation. You will need to know how the economy is doing - now and in the future.

This means that you will need to do your homework and not go by herd instinct. The herd never gets it right all the time - hence economic and property cycles.

When an owner-occupier times his purchase right, he has one fewer big worry in life.

When an investor gets it right, he gets a windfall and lives the good life, but it never stops there, does it? The euphoria of earning big in a short few months or over one to two years what he could not earn in 10 or 15 years is intoxicating, to say the least. The profits will be re-invested in, what else, but property.

We read of success stories of people starting with a single property and having a string of them within a decade or two. How do they do it? We see many advertisements these days offering courses that will teach us how to make it big by investing in property. It is not a big secret: It is called leveraging - using other people's money to work for you.

When the value of your home rises significantly, as they always do during an up-cycle, you can secure a loan from banks by pledging your home as collateral. This is because your property's market value is much more than your outstanding loan.

You can use this loan to re-invest in property. In Singapore, buying a property under construction allows the investor to maximise his leverage. Since only a 20-per-cent down payment is required upon purchase, the investor can, in theory, play with an asset which is worth five times his initial capital.

Some people can own a number of properties in a short time because they are fully invested and fully leveraged. Profits are almost immediately re-invested. Like a person who buys his furniture on hire purchase, it looks like he is the owner, but the furniture is not yet fully his, even though no one else knows that.

This brings me to my last point. When an owner-occupier mis-times his purchase, he spends his whole working life paying for it. When a fully-leveraged investor gets it wrong, like in the real estate board game Monopoly, he becomes a bankrupt and retires from the game.

The writer is head of research and consultancy at Chesterton Suntec International.