After weeks of warning, the government finally announced steps to cool down the Singapore property market yesterday.
The first to go is the interest absorption scheme (IAS), which allows buyers of new properties to pay only the downpayment and nothing more until the property is completed. This scheme is particular useful to property speculators who hope to cash in on their property investment before it is completed.
Another scheme to go is interest-only housing loans. These loans are designed for buyers to pay a very small installment until the property is completed. These loans will now be forbidden.
The two “bans” take effect immediately across all private residential projects. Only uncompleted properties which have already been launched under the IAS prior to yesterday can continue to do so.
Lastly, the government will also resume land sales from next year. This will help increase the supply of new sites and cool rising prices.
The measures will no doubt dampen the sentiments of property speculators, who will now have to fork out more capital before they can buy a property.
With less competition from speculators, serious property buyers will have a better chance of finding a more affordable home.