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Subscribe to this list via RSS Blog posts tagged in ABSD

Easing of Some Property Cooling Measures - Sellers Duty and TDSR

 

The Government has just relaxed some of the cooling measures in place to reign in property prices in Singapore but ABSD or additonal buyer's stamp duty and the LTV or loan to valuation limits remain unchanged. Not so good news for buyers. For sellers, the SSD is cut from the 4-16% range depending on the holding period to 4-12%, a 4% cut for each holding year. The minimum holding period to escape SSD penalties was aslo reduced from 4 to 3 years.

The current TDSR restrictions state that your total loans cannot exceed a limit of 60% of your monthly gross income but now this limit will no longer apply hwen borrowers borrow against the values of their property to get cash provided the loan to value ratio is 50% or below.

Not what many investors are hoping for but its a start. To read more visit: Govt eases some property cooling measures report in the Straits Times.

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Resale Prices of Private Property Fall Further in June 2014

A tentative report by the Singapore Property Exchange showed that resale prices of private property dropped another 1.4% in June. Prices are at the lowest over the last 1 1/2 years since Dec 2012. Starting at the Core Central Region (CCR) and moving outwards through the Rest of Central Region (RCR) and Outside of Central Region (OCR), the prices fell 1.7, 3.2 and 0.3% respectively. The OCR prices dropped the least because the properties here have lower prices. The CCR and RCR properties have to deal with unsold units and curbs on resale such as ABSD. Encouragingly, the number of resale units that exchanged hands has increased 7.9% to about 452 units. 

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HDB COV prices have been dropping over recent months. COV was $15000 and $12000 in September and October respectively and is predicted by some to fall to $10000 by year's end. HDB prices have dropped 1.6% in October compared with a small 0.2% gain in September which correlates with the rise in the number of resale HDB units in October, a 26.5% increase over September.

Over in the private residential market, resale prices declined only 0.1% from September. The suburban and central areas fell the most at 1.4 and 0.9% respectively vs a slight gain of 0.4% in the city fringes. Mirroring the increase in sales in the HDB market, 13.6% more units (486 units) exchanged hands in the resale market in October compared with September. This however is quite a drop compared to Oct 2012 when 1,435 unts exchanged hands. 

Both HDB and private residential markets have seen cooling measures introduced. HDB has capped the mortgate servicing ratio at 30% of the borrower's gross monthly income and reduced the tenure of loans to 25 years for HDB loans and 30 yrs for bank loans. Also, permanent residents are now barred from purchasing flats during the first 3 years after receiving PR status. The large number of new flats in the pipeline may also dampen the HDB resale market. For private residential properties, the total debt servicing ratio (TDSR) limits borrowers total debt obligation to 60% of gross monthly income and there is the additional buyer's stamp duty or ABSD have worked to dampen the market. For more details on the above, visit todayonline.com

For new private properties, many buyers are also staying in the sidelines as they perceive a bear market coming and are waiting for prices to drop. Units that are still moving tend to be the units in the lower quantum range as demonstrated by the success of the InFlora recently. Property developers have started to respond to market conditions by reducing prices.

 

Credit TodayOnline

Tagged in: ABSD cov hdb Resale TDSR
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