Just a few days ago, I got a friend who wrote this:

“realises that he has missed a window of opportunity, when every man on the street have their own theories on property investment…the next downturn perhaps…..”

And then yesterday, the government announced several measures to cool our property market.

Compared to previous measures, these measures are quite significant and will help to moderate the demand among property investors. Coupled with plans to increase the supply of new flats, hopefully we can prevent a property bubble from developing further.

A summary of the changes are as follows:

1. Increase the holding period for imposition of Seller’s Stamp Duty (SSD) from the current one year to three years.

2. For property buyers who already have one or more outstanding housing loans at the time of the new housing purchase:

(a) Increase the minimum cash payment from 5% to 10% of the valuation limit; and

(b) Decrease the Loan-to-Value (LTV) limit for housing loans granted by financial institutions regulated by MAS to these buyers from the current 80% to 70%.

Further, HDB has also announced additional restrictions on the co-ownership of HDB flats and private properties.

3. The minimum occupation period (MOP) of non-subsidised flats for resale and subletting of flat will be increased from 3 to 5 years.

4. Buyers of non-subsidised flats will be disallowed from concurrently owning both an HDB flat and a private residential property within the MOP.

All these measures took immediate effect from yesterday.

More details here:

MND Press Release

HDB Changes

The Housing & Development Board (HDB) recently unveiled policy changes designed to hurt speculators and make it more expensive for non-Singaporeans to buy government-subsidised flats. These changes include:

1) It will now be possible to apply for a second concessionary loan, even if you are downgrading. However, the quantum of the second concessionary loan will be reduced by the full CPF proceeds and part of the cash proceeds from the sale of the existing or immediate past HDB flats.
2) Minimum occupation period for resale of non-subsidised flats has been increased to 3 years.
3) Lease buyback scheme extended to those who previously owned 4-room and bigger flats.
4) In case of Singapore PRs who marry citizens, HDB will withhold $10k of the housing subsidy until the SPR takes up citizenship or they have a Singapore citizen child.
5) New non-Malaysia SPR quota of 5% at neighbourhood level and 8% at block level.
6) Ethnic limit for Indian/Others raised to 12% at neighbourhood level and 15% at block level.

We are now starting to see more and more measures being put in place to prevent a runaway increase in HDB and private property prices.

Prices have already gone up a lot mainly because the increase in HDB supply over the past couple of years was insufficient to meet the increase in demand from a fast growing population. Price is always a function of demand and supply – as simple as that.

When all these changes take effect (and our population starts to decrease due to more stringent criteria on foreign workers), HDB prices should stabilize and perhaps even drop. However, I don’t expect a drastic drop as the cost would be too huge for the government to let it happen.