30th Aug 2010, Channelnewsasia
Govt introduces new measures to cool S’pore property market
SINGAPORE: The government on Monday introduced more measures to cool the buoyant property market.
These include raising the holding period for which a home seller must pay a stamp duty and reducing the maximum bank loan amount for existing home owners who want to buy another property.
The measures, which take immediate effect, came as a strong economy and low borrowing rates have continued to push property prices up, sparking concerns of a property bubble.
Private property prices shot up by some 11 per cent in the first half of this year and have now exceeded the previous peak in 1996.
National Development Minister Mah Bow Tan said prices are “on the high side”.
He said: “If the current momentum in the market continues, what will likely happen is that a property bubble will form. And when the bubble burst, and not if, but when the bubble burst, there will be severe implications for individuals, as well as for the economy on the whole.”
So the government has moved to curb speculation and also encourage financial prudence among buyers.
The holding period for the seller’s stamp duty has been increased from one to three years to discourage home owners from flipping. The seller’s stamp duty was first introduced in February this year.
Another measure will impact those who have one or more outstanding housing loan. Home buyers who already have at least one mortgage will have to pay more cash upfront when buying their next property.
The minimum cash payment has been doubled from five per cent to 10 per cent of the home’s valuation, while the maximum bank loan amount has been reduced from 80 to 70 per cent.
The government said the objective of the measures is “to ensure a stable and sustainable property market where prices move in line with economic fundamentals”.
The Housing and Development Board (HDB) has also introduced anti-speculative measures to its resale market. These include increasing the minimum occupation period for non-subsidised flats to 5 years.
Mr Mah stressed that HDB flats are meant for long-term occupation, and not for speculation. Home owners can no longer own both private property and an HDB flat at the same time during the minimum occupation period.
So those who buy a non-subsidised HDB flat must sell off their private property within six months. Similarly, home owners of non-subsidised HDB flats will not be allowed to own private property before the minimum occupation period is up.
These changes will only apply to those submitting flat applications from August 30 and will not be applied retrospectively.
Mr Mah also gave the assurance that there will be more help for first-time home buyers.
The HDB will raise the supply of flats. Up to 22,000 new Build-To-Order (BTO) flats will be made available next year.
Together with the 16,000 BTO flats released this year, HDB will be offering more new flats over the two years than all the flats in Toa Payoh town today.
In addition, the waiting time for a BTO flat will be reduced by six months to 2-1/2 years.
To help the sandwiched class, those earning between S$8,000 and S$10,000 will now be eligible for flats under the Design, Build and Sell Scheme (DBSS).
HDB will also release land for 4,000 DBSS flats and 4,000 Executive Condominiums next year.
It said new sites for DBSS projects in Bedok, Hougang and Jurong will be put up for tender later this year. Sites in Punggol, Pasir Ris, Bukit Panjang and Tampines will also be released for the development of executive condominiums.