{"id":123859,"date":"2021-12-17T04:57:43","date_gmt":"2021-12-16T21:57:43","guid":{"rendered":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/govt-carefully-considered-scope-timing-of-new-cooling-measures\/"},"modified":"2021-12-17T13:02:48","modified_gmt":"2021-12-17T06:02:48","slug":"govt-carefully-considered-scope-timing-of-new-cooling-measures","status":"publish","type":"post","link":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/govt-carefully-considered-scope-timing-of-new-cooling-measures\/","title":{"rendered":"Gov\u2019t carefully considered scope, timing of new cooling measures"},"content":{"rendered":"


\nGov\u2019t carefully considered scope, timing of new cooling measuresThe higher ABSD aims to moderate the demand from those who wish to purchase investment properties, while tighter loan limits aim to encourage \u201cgreater financial prudence\u201d among home buyers.
\nThe Government has \u201ccarefully considered\u201d the scope and timing of the new property cooling measures, reported Channel News Asia (CNA) citing National Development Minister Desmond Lee.
\nThe minister explained that the measures \u2013 which include higher Additional Buyer\u2019s Stamp Duties (ABSD), tighter Loan-to-Value (LTV) limits and lower Total Debt Servicing Ratios (TDSR) \u2013 are necessary to reduce the risk of a \u201cdestabilising correction\u201d in prices, which would affect many households.
\n\u201cWhile there is continuing uncertainty created by COVID-19, we have decided to move now to reduce the risk of a self-reinforcing cycle of price increases in the private and HDB resale markets, that will impact housing affordability,\u201d said Lee as quoted by CNA.
\nSince the first quarter of 2020, HDB resale prices and private home prices have considerably increased despite the economic impact of the COVID-19 pandemic, he said.
\nAs such, the House Price to Income (HPI) ratio in both the HDB resale and private home markets have been on the uptrend, albeit they remain below their historical averages. Notably, the HPI measures housing affordability.
\n\u201cIn particular, HPI for HDB resale flats reached 4.4 times in the first three quarters of 2021, which is well below its level a decade ago. However, it is now on a clear upward trend,\u201d said Lee.
\nMoreover, demand and transaction volumes for Build-To-Order (BTO) flats have been high due to factors like the \u201cvery low\u201d interest rate environment, shrinking household sizes and recent disruptions to construction work.
\nLee noted that all these created a \u201cclear upward market momentum in prices and transaction volumes\u201d, despite near-term uncertainty on the pandemic following the emergence of the Omicron variant.
\n\u201cLeft unchecked, prices are likely to run ahead of economic fundamentals. This will increase the risk of a destabilising correction later on that will hurt many households.\u201d
\nWith major central banks looking to tighten monetary policy, borrowers may also be vulnerable to the likely hike in interest rates within the next year and beyond.
\n\u201cA combination of rising prices and higher interest rates will risk a significant increase in debt servicing costs for future buyers,\u201d said Lee.
\nThe new measures will thus help support a \u201cstable and sustainable property market in the medium term\u201d, while ensuring that housing remains affordable for Singaporeans.
\nThe higher ABSD rates, for instance, will moderate demand coming from those buying properties for investment, he said.
\nThe tighter TDSR threshold will also \u201cencourage greater financial prudence among home buyers, providing an additional buffer against potential income reductions or interest rate increases\u201d.
\nHe does not expect the TDSR threshold adjustment to affect most borrowers purchasing HDB flats since around 97% of such borrowers have TDSRs of less than 55%.
\nMeanwhile, the tightened LTV limits will \u201cencourage greater financial prudence\u201d among buyers within the public housing market.
\nLee explained that the move is not expected to significantly affect first-time buyers, particularly for lower- to middle-income families since these households purchasing an HDB resale flat can get \u201cgenerous grants\u201d as well as use their Central Provident Fund (CPF) savings upfront to pay for the unit.
\nLooking for a property in Singapore? Visit PropertyGuru\u2019s\u00a0Listings,\u00a0Project Reviews\u00a0and\u00a0Guides.
\nCheryl Chiew, Digital Content Specialist at PropertyGuru, edited this story. To contact her about this story, email:\u00a0cheryl@propertyguru.com.sg.
\n
\nSource : proppertyguru.com.sg\/Property Market
\nRead more…Gov\u2019t carefully considered scope, timing of new cooling measures<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Gov\u2019t carefully considered scope, timing of new cooling measuresThe higher ABSD aims to moderate the...<\/p>\n","protected":false},"author":1,"featured_media":123860,"comment_status":"false","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"spay_email":"","footnotes":"","jetpack_publicize_message":"","jetpack_is_tweetstorm":false,"jetpack_publicize_feature_enabled":true},"categories":[1],"tags":[],"class_list":["post-123859","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-property-news"],"jetpack_featured_media_url":"https:\/\/i2.wp.com\/www.siamlandbank.com\/propertynews\/wp-content\/uploads\/2021\/12\/singapore-marina.jpg?fit=820%2C411&ssl=1","jetpack_publicize_connections":[],"jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/p75ss1-wdJ","jetpack-related-posts":[{"id":100382,"url":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/sentiment-among-property-developers-down-on-july-cooling-measures\/","url_meta":{"origin":123859,"position":0},"title":"Sentiment among property developers down on July cooling measures","date":"October 23, 2018","format":false,"excerpt":"\r The latest round of cooling measures were described as unexpected and surprising, as well as extremely disruptive. 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Analysts expect the latest property cooling measures, which describe as \u201charder hitting\u201d, to\u2026","rel":"","context":"In "Property News"","img":{"alt_text":"","src":"https:\/\/i1.wp.com\/www.siamlandbank.com\/propertynews\/wp-content\/uploads\/2021\/12\/HDB-RESALE-PRICES.jpg?fit=820%2C410&ssl=1&resize=350%2C200","width":350,"height":200},"classes":[]},{"id":93765,"url":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/market-barely-had-time-to-respond-to-new-cooling-measures\/","url_meta":{"origin":123859,"position":2},"title":"Market barely had time to respond to new cooling measures","date":"July 13, 2018","format":false,"excerpt":"\r The Singapore government departed from its recent practice of announcing sensitive information on Fridays when it introduced its latest round of cooling measures on 5 July, which is a Thursday \u2013 barely giving the market time to think. In a note, Withers KhattarWong partner Kenneth Szeto said announcements were\u2026","rel":"","context":"In "Property News"","img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":123853,"url":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/singapore-property-stocks-fall-amid-new-cooling-measures\/","url_meta":{"origin":123859,"position":3},"title":"Singapore property stocks fall amid new cooling measures","date":"December 17, 2021","format":false,"excerpt":"\r The latest round of cooling measures, which saw higher ABSD rates, a tighter TDSR threshold and a lower LTV limit for HDB-granted loans, impacted Singapore property stocks negatively. Singapore\u2019s property firms saw their shares drop on Thursday (16 December) following the Government\u2019s unexpected announcement of new property cooling measures,\u2026","rel":"","context":"In "Property News"","img":{"alt_text":"","src":"https:\/\/i1.wp.com\/www.siamlandbank.com\/propertynews\/wp-content\/uploads\/2021\/12\/singapore-city.jpg?fit=820%2C410&ssl=1&resize=350%2C200","width":350,"height":200},"classes":[]},{"id":123833,"url":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/singapore-unveils-new-property-cooling-measures\/","url_meta":{"origin":123859,"position":4},"title":"Singapore unveils new property cooling measures","date":"December 16, 2021","format":false,"excerpt":"\r Singapore unveils new property cooling measuresThe new Singapore property cooling measures, which include a higher ABSD, lower TDSR, and tighter LTV, will take effect from today, 16 December 2021. 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