Tag Archives: MAS

MAS: Still too early to ease cooling measures

Property developers and homeowners hoping that the cooling measures will be relaxed soon will have to wait longer after the Monetary Authority of Singapore (MAS) said it is still premature to ease the policies, reported Today Online.

“Property prices have softened somewhat, but like I said last year, in the context of the price increase that had occurred — 60 percent over three years — the softening we have seen is really not all that much. So, it’s still premature to consider removing any of the cooling measures that are in place,” explained MAS managing director Ravi Menon at a media briefing on Tuesday.

Private home prices started climbing steeply in mid-2009 before peaking in Q3 2013. The introduction of the Total Debt Servicing Ratio (TDSR) framework in June 2013 saw the market gradually decline.

Based on flash estimates by the Urban Redevelopment Authority (URA), prices of private units dipped 0.9 percent in Q2, or the seventh consecutive quarter of price falls since the 2013 peak. However, prices corrected by less than seven percent from their record high.

“It is fair from the point of view of a policy stance aimed at re-engineering home affordability. The property market cooling is happening in an orderly fashion, and it is prudent to allow this to continue,” said Barclays economist Leong Wai Ho.

Meanwhile, Century 21 chief executive Ku Swee Yong wasn’t surprised by Menon’s comments.

“Based on the still-strong reaction from developers to Government Land Sale tenders and the decent response to some of the new launches, this is probably not the correct time to be easing curbs,” he noted.

Menon’s views mirror that of Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam and National Development Minister Khaw Boon Wan.

Last October, Mr Tharman stated that “prices have some distance to go in achieving a meaningful correction”, while Mr Khaw mentioned it was not the right time to ease the cooling measures since there is still room for property prices to moderate.

Source – Propertyguru

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Singapore Property Market Cooling Measures

Below is a comprehensive view of the latest government policies related to the residential property market. These policies are often referred to as the ‘Property Market Cooling Measures‘.

Source : SRX

 

» Click to Calculate your Stamp Duty.

A Brief Summary of Cooling Measures

1. Additional Buyer’s Stamp Duty (ABSD)

Citizenship ABSD Rate on Primary
Home Purchase
ABSD Rate on Secondary
Home Purchase
ABSD Rate on Tertiary &
Subsequent Purchase
Singapore Citizens N/A 0% –> 7% 3% –> 10%
Permanent Residents 0% –> 5% 3% –> 10% 3% –> 10%
Foreigners1 and non-individuals 10% –> 15% 10% –> 15% 10% –> 15%

Note:1.Citizens of the USA, Switzerland, Liechtenstein, Norway, Iceland will be treated the same as Singapore Citizens due to FTA agreement.

2. Sellers’ Stamp Duty (SSD)

Residential Property Sold In Year 1 Year 2 Year 3 Year 4
SSD Rate since Feb 2010 Same as basic
Buyer Stamp Duty
N/A N/A N/A
SSD Rate since Aug 2010 Same as basic
Buyer Stamp Duty
2/3 of basic
Buyer Stamp Duty
1/3 of basic
Buyer Stamp Duty
N/A
SSD Rate since Jan 2011 16% 12% 8% 4%

3. Loan-to-Value (LTV) Ratio

Source: SRX / StreetSine

Policy Details

Effective Date Major Cooling Measures that Affect Residential Property Market
27 August, 2013 1. Singapore Permanent Resident Households need to wait three years from the date of obtaining SPR status, before they can buy a resale HDB flat.
2. Maximum tenure for HDB housing loans is reduced from 30 years to 25 years. The Mortgage Servicing Ratio (MSR) limit is reduced from 35% to 30% of the borrower’s gross monthly income.
3. Maximum tenure of new housing loans and re-financing facilities granted by financial institutions for the purchase of HDB flats (including DBSS flats) is reduced from 35 years to 30 years. News loans with tenure exceeding 25 years and up to 30 years will be subject to tighter LTV limits.
29 June, 2013 1. TDSR: Financial institutions are required to consider borrowers’ other outgoing debt obligations when granting property loans. His total monthly repayments of his debt obligations should not exceed 60 per cent of his gross monthly income.
2. In particular, MAS requires:
-borrowers named on a property loan to be the mortgagors of the residential property for which the loan is taken;
-“guarantors” who are standing guarantee for borrowers otherwise assessed by the financial institutions at the point of application for the housing loan not to meet the TDSR threshold for a property loan to be brought in as co-borrowers; and
-in the case of joint borrowers, that financial institutions use the income-weighted average age of borrowers when applying the rules on loan tenure.
12 January, 2013 1. ABSD: Citizens pay 7/10% on second/third purchase (from 0/3%); Permanent Residents (PR) pay 5/10% for first/second purchase (from 0/3%); foreigners and non-individuals now pay 15%.
2. LTV for second/third loan now 50/40% from 60%; non-individuals’ LTV now 20% (from 40%).
3. Mortgage Servicing Ratio (MSR) for HDB loans now capped at 35% of gross monthly income (from 40%); MSR for loans from financial institutions capped at 30%.
4. PRs no longer allowed to rent out entire HDB flat.
6 October, 2012 1. Mortgage tenures capped at a maximum of 35 years.
2. For loans longer than 30 years or for loans that extend beyond retirement age of 65 years: LTV lowered to 60% for first mortgage and to 40% for second and subsequent mortgages.
3. LTV for non-individuals lowered to 40%.
8 December, 2011 1. ABSD introduced for further cooling measures:
– Foreigners and non-individuals pay 10%, PRs buying second and subsequent property pay 3%, Singaporeans buying third and subsequent property pay 3%.
2. Developers purchasing more than four residential units and following through on intention to develop residential properties for sale would be waived ABSD
– To qualify, developers have to produce proof of development and sale within five years.
14 January, 2011 1. Holding period for imposition of SSD increased to four years from three.
2. SSD rates raised to 16%, 12%, 8% and 4% of consideration.
3. LTV lowered to 60% from 70% for second property.
4. LTV for non-individual residential purchasers capped at 50%.
30 August, 2010 1. Holding period for imposition of SSD increased to three years from one.
2. Minimum cash payments raised to 10% from 5% for buyers with one or more outstanding housing loans.
3. LTV lowered to 70% from 80% for second properties.
20 February, 2010 1. Introduction of SSD for residential property and land sold within one year of purchase.
2. LTV lowered to 80% from 90% on all housing loans except HDB loans.
14 September, 2009 1. Interest absorption scheme (deferment of instalments until TOP) and interest-only housing loans (interest payment only until TOP) were scrapped for all private properties.

June new home sales up 24%

J-Gateway

Sales of new private homes jumped 24% in June to 1,806 units from the previous month. The 738-unit J Gateway contributed 40.8% of sales last month, with 737 units sold within the first day of preview on June 28 at a median price of $1,486 psf. The other best-seller was the 616-unit Jewel @ Buangkok, which saw 282 units sold last month at a median price of $1,182 psf. This was launched 1 day before the Monetary Authority of Singapore (MAS)  introduced the Total Debt Servicing Ratio (TDSR) framework

Despite the seventh round of cooling measures introduced on Jan 11, developers chalked up total sales of 10,061 (excluding executive condominiums) in 1H2013, or an average of 1,692 units a month. Property consultants and analysts expect monthly sales to decline in July, partly as a result of the introduction at end-June of a total debt servicing ratio, which is to be capped at 60% of a property buyer’s monthly income. Chia Siew Chuin, Colliers International’s research & advisory director, forecasts July’s sales to be around 1,000 units, “before recovering in the following months”.

Original article – 

June new home sales up 24%
Monday, 22 July 2013

© 2013 – The Edge Singapore

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