Home Affairs and Law Minister K Shanmugam mentioned in the Strait Times about the Cooling measures (http://str.sg/Z94K).
He didn’t commit the timeline,and rightfully so, as he’s not the Minister in charge(the Ministry of National Development is). But I am sure he does have an overview of what is happening, being an astute observer of world and local economics.
What are the cooling measures, if any, can be removed? I can for sure tell you what cannot be removed. TDSR or Total debt servicing ratio, will not be changed for now. This is an effective control of “helping” people to manage their finances, so that they don’t stretch beyond their means. With rising bank mortgage rates, this will be an option that won’t be removed.
Second, buyers duty may be tweaked a little, especially to help local Singaporeans,buy their second property. Currently they need to pay extra 7% for the second property. The market right now seems to have cooled down quite abit, from the statistics shown of unsold units reaching its end of “stamp-duty-free” period. That means, developers who lapsed a time frame to sell the units, now have to pay stamp duty for holding the unsold units.
So, if TDSR is not a problem, and Singaporeans can afford a 2nd property, they can buy those unsold units. It lets of steam, just a little bit.
This will not necessarily bring up the prices again, but it will be good news for HDB dwellers interested in buying a second home as an investment. Anyway prices for HDB are now also controlled by market prices determined by the buyers and sellers. Previously, sellers obtain the valuation report first, then the selling price is determined, and normally above the valuation price, and if the buyers accept.
Now, it is really controlled, with buyers market, sellers expectation, supply and demand for each location. Right now, prices for HDB are at an all time low now. A 5rm HDB flat in Pasir Ris that was valued at $540k in 2013 can now be bought at $460k, a paper-loss of $80k.
Therefore, the government will need to access the risks involved, if they were to tweak any of the cooling measures. They have to wait and see if the Permanent Residents who will come into the market after the 3 years “hiatus”( a measure imposed last year that new PRs can’t buy a HDB until after 3 years) will buy a HDB, and how many will flood the market. The new BTOs will start hitting the 5 years soon in 2018, and will soon flood the resale market. This has to be watched as well.
The economy has started to shake,with many getting retrenched. This will set a vicious cycle. So I don’t think the cooling measures will be taken out anytime soon, as the government take a shrewd pragmatic approach to monitoring the real estate scene in Singapore
For others, we wait with bated breath.
(the ideas, dialogues, sentiments are purely the writer’s)