While the majority of people surveyed like the idea of price controls, they want some of the rules softened a bit. So, most agree that governments cooling measures are working, many homebuyers hope to have some of the curbs relaxed from the stringent level they are currently at.
This information comes from a recent survey of 940 people conducted during the last Quarter of 2014 by PropertyGuru.com
Sol Acres EC Cooling Measures
The three most request measures to be relaxed or changed are:
Additional Buyers Stamp Duty (ABSD) on 2nd and additional properties other than Sol Acres EC
Total Debt Servicing Ratio (TDSR) framework
Mortgage Servicing Ratio (MSR) on HDB loans
Right now Singaporeans pay 7% ABSD on a 2nd home unit and 10% for third and subsequent properties. Foreigners buying private residences in Singapore have to pay a higher ABSD of 15%.
The monetary Authority of Singapore (MAS) enacted TDSR to curb, cool, and prevent over buying from Singapore’s residence. This policy passed in June 2013 limited the total monthly payments on loans, which include residence, car, and credit card debt not to exceed 60% of a person’s income when buying Sol Acres EC.
Sol Acres Choa Chu Kang
HDB got the MSR limit to 30% of a person’s gross monthly salary bringing it down from the previous 35% this was done in August 2013.
This restrained out of control property buying as it limited a person’s MSR is greater than 30% or have a PDS are that is near 60%.
Analysts now feel that if the chances government relaxing the regulations in 2015 is nil as currently they are leaning toward further slowing of the market.
The Deputy Prime Minister and finance minister Tharman Shamurgaratnam issued in his budget statement for 2014, released in last February, a statement saying, that the market is still too volatile to start relaxing the property cooling measures for Sol Acres EC given the rapid rise in prices over the last few years.
The chief executive officer of Co assets and director, ascended assets Getty Goh echoed the sentiments when interviewed by PropertyGuru saying that the minister that the market prices have made no significant correction as yet and the price controls for Sol Acres should remain in place until this happens.
Sol Acres Property Measures
Right now housing prices are down about 4 to 5%, which is not a significant drop. The median price of an private home in the CCR (core central region) and RCR (rest of central region) are still going for more than $900 PSF and that this is a bit too steep for most people who are looking for better housing arrangements, Goh further added.
Goh further believes the government wants prices to decline further to better meet the needs of Singapore’s homebuyers.
When asked about how these would measures might be relaxed are removed, Goh expressed his thoughts as saying that a significant price drop similar to the levels seen during the 2008 financial crisis would be needed to trigger rollback or removal of these various measures.
Sol Acres EC
In 2008 during the goblet financial meltdown, property prices came down as far as 20% within a year. But right now analysts are seeing more of a gradual decline, so if there is no sudden drop of more than 20 to 30% within a short period of time. This would require the government to come in and repeal some of these measures to stimulate the market.
Goh believes also it is too soon and the training is not right to relax these policies given that there has only been a downturn in the market for 4 quarters for Sol Acres EC.
In the past, down markets have lasted between 3 to 5 years, which means Singapore’s current market has not yet reached the point where the government needs to step in to other review, relax, or remove the measures currently in place.