{"id":86412,"date":"2018-04-25T07:30:14","date_gmt":"2018-04-25T00:30:14","guid":{"rendered":"http:\/\/www.siamlandbank.com\/propertynews\/property-news\/cooling-measures-in-hong-kong-and-singapore-what-works-what-doesnt\/"},"modified":"2018-04-25T08:05:07","modified_gmt":"2018-04-25T01:05:07","slug":"cooling-measures-in-hong-kong-and-singapore-what-works-what-doesnt","status":"publish","type":"post","link":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/cooling-measures-in-hong-kong-and-singapore-what-works-what-doesnt\/","title":{"rendered":"Cooling measures in Hong Kong and Singapore: what works, what doesn't"},"content":{"rendered":"


\n\u00a0
\nGovernments in the two rival cities have poured icy water on their overheating housing markets, with contrasting results.
\nBy Duncan Forgan
\nIt would be fair to say that Singapore\u2019s famously stringent cooling measures haven\u2019t always made those inside the country\u2019s real estate sector feel warm and fuzzy.\u00a0
\nBut as the market in the Lion City displays signs of improving vitality while showing demonstrable value, fairness and sustainability \u2013 especially in comparison to regional rivals such as Hong Kong \u2013 there have been converts to the cooling measures cause.\u00a0\u00a0
\nWhen the country\u2019s government first started using a firmer hand to stabilise the market, property prices were escalating at a dramatic rate, rising by up to 60 percent between 2009 and 2013.
\nThe government\u2019s application of icy water on the overheating market through measures such as raising the rates for Additional Buyer\u2019s Stamp Duty (ABSD) was strong and decisive \u2013 and resulted in home prices dropping for a record 15th quarter in June 2017.\u00a0
\nDespite pressure from developers and others who accuse the government of presiding over a sector that shows only very timid signs of life, cooling measures are likely to be in place for some time to come.\u00a0
\nIn March this year, the Singapore government reduced stamp duty imposed on sellers and some mortgage restrictions. That helped stoke optimism that the country\u2019s property market is rebounding, with home sales jumping and developers showing more aggression at land auctions.\u00a0
\nMore:\u00a0Inside one of Singapore\u2019s strangest homes
\nRavi Menon, managing director of the Monetary Authority of Singapore, however, quashed any notion that cooling measures were on their way out. \u201cMortgage rates are very low,\u201d he says at the release of the bank\u2019s annual report in June. \u201cAnd the risk of a renewed unsustainable surge in property prices is not trivial.\u201d
\nIndeed, few would argue that the government has not achieved what it set out to when it stepped in to apply some correction to the market.
\n\u201cDespite the rolling out of tax-based and other restrictive policies by various governments in other countries to cool their housing markets, Singapore seems to be the only major market where prices are effectively contained,\u201d says Christine Li, director and head of research at Cushman & Wakefield Singapore.
\n\u201cAs of 2016, Singapore\u2019s housing price to income ratio of 4.8 is the lowest among the global \u201csuperstar\u201d cities such as New York, London and Hong Kong \u2013 the latter has a ratio of 18.1 \u2013 thus making Singapore an attractive market in terms of value.\u201d
\n\u201cThe cooling measures have been very successful,\u201d adds Alex Shlaen, managing director at Panache Management, a luxury brands and investment advisor. \u201cProbably even over-successful. The government dealt with a shortage of supply by adding significantly to the HDB (Housing Development Board) government-subsidised public housing. It was the luxury market which was the main target and the main victim. But the prices of luxury properties are now among the lowest in the world relative to similar top locations.\u201d
\nThe Singapore government\u2019s attempts to cool the country\u2019s property sector are widely viewed as being successful.
\nYet while even the strongest critics of Singapore\u2019s cooling measures at least acknowledge their efficacy, it\u2019s a hugely different story in Hong Kong where attempts to restore sanity to an overheated market have largely failed. In the view of many experts, in fact, the demand suppression measures enacted by the Hong Kong Monetary Authority have only succeeded in making matters more problematic.
\n\u201cThey have failed to rein in property prices,\u201d says Denis Ma, head of research for JLL Hong Kong. \u201cAnd, in our opinion have made the situation worse by shutting down the secondary market.\u201d
\nHousing prices in Hong Kong have increased by as much as 80 percent since the government started introducing cooling measures in late 2009. These include an array of stamp duty levies and reduced borrowing capacity in the form of lower LTV ratios and stress-tests of debt-servicing ratios.\u00a0
\nHowever, these measures have disproportionately affected buyers in the secondary market, notes Christopher Dillon, author of the real estate guide Landed Hong Kong.
\n\u201cDevelopers now offer financing packages that are outside the Hong Kong Monetary Authority\u2019s regulations,\u201d he says. \u201cThese packages make new homes far more attractive than pre-owned ones. That\u2019s crushed volumes in the secondary market.\u201d
\n\u201cHousing prices and volumes use to correlate well,\u201d agrees Ma. \u201cHowever, since the government introduced these measures, this relationship has been distorted; volumes down but prices up!\u00a0
\n\u201cThe biggest problems with the government\u2019s measures is clearly that they\u2019ve been ineffective and have locked out a lot of people from getting on the housing ladder. And for a lot of these people, it\u2019s not necessarily that they don\u2019t have the ability to service a mortgage. Rather it\u2019s the significant increase in upfront transaction costs that sends them to the sidelines.\u201d
\nHong Kong\u2019s cooling measures have also missed a key target. \u201cTighter mortgage regulations have little effect on cash buyers,\u201d observes Dillon.
\nCooling measures, by their very nature, are not intended to excite. They are specifically designed as a way of placing barriers in front of speculators and developers: hardly a sexy recipe. Nevertheless, if applied correctly and consistently, they can provide a necessary pressure valve. In Singapore, this valve seems to be having its intended impact. In Hong Kong, the apparatus appears too flimsy to handle the heat.
\n\u00a0
\nThis article was originally published on\u00a0Property-Report.com. For more stories from Asia\u2019s most trusted and enduring luxury real estate, architecture and design publication, visit\u00a0Property-Report.com
\n
\nSource : proppertyguru.com.sg\/Property Market
\nRead more…Cooling measures in Hong Kong and Singapore: what works, what doesn’t<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

\u00a0 Governments in the two rival cities have poured icy water on their overheating housing...<\/p>\n","protected":false},"author":1,"featured_media":86413,"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-86412","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\/2018\/04\/cool-run-ins-singapore-compressor.jpg?fit=1000%2C666&ssl=1","jetpack_publicize_connections":[],"jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/p75ss1-mtK","jetpack-related-posts":[{"id":142708,"url":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/hong-kong-developers-urge-government-to-remove-all-property-cooling-measures-make-hongkongers-happy\/","url_meta":{"origin":86412,"position":0},"title":"Hong Kong developers urge government to remove all property cooling measures, make Hongkongers \u2018happy\u2019","date":"February 21, 2024","format":false,"excerpt":"\r Hong Kong developers have joined a chorus urging the government to remove all the remaining cooling measures to revive the property sector.\r \r Source : South China Morning Post\r Read more...Hong Kong developers urge government to remove all property cooling measures, make Hongkongers \u2018happy\u2019","rel":"","context":"In "Property News"","img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":872,"url":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/hong-kong-property-cooling-measures-unfair-argues-homeowner\/","url_meta":{"origin":86412,"position":1},"title":"Hong Kong property cooling measures unfair, argues homeowner","date":"January 6, 2016","format":false,"excerpt":"\r A homeowner on Wednesday urged the High Court to review government property cooling measures, claiming he was unfairly charged HK$273,000 stamp duty.\r \r Source : South China Morning Post\r Read more...Hong Kong property cooling measures unfair, argues homeowner","rel":"","context":"In "Property News"","img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":58432,"url":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/hong-kong-government-should-lift-cooling-measures-to-free-up-supply-in-secondary-market\/","url_meta":{"origin":86412,"position":2},"title":"Hong Kong government should lift cooling measures to free up supply in secondary market","date":"June 20, 2017","format":false,"excerpt":"\r It was astonishing to learn that the Hong Kong government has decided to launch a new series of cooling measures to distort market demand for properties instead of seeking to boost home supply by phasing out the restrictive measures on second-hand home sales and purchases. Last month, the Hong\u2026","rel":"","context":"In "Property News"","img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":142818,"url":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/hong-kong-property-stocks-jump-after-city-scraps-cooling-measures\/","url_meta":{"origin":86412,"position":3},"title":"Hong Kong property stocks jump after city scraps cooling measures","date":"February 28, 2024","format":false,"excerpt":"\r Financial Secretary Paul Chan announced that Hong Kong will scrap all buy-side property tightening measures for residential properties with immediate effect.\r \r Source : cnbc.com\r Read more...Hong Kong property stocks jump after city scraps cooling measures","rel":"","context":"In "Property News"","img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":144959,"url":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/hong-kong-property-deals-fall-by-a-quarter-as-exuberance-over-scrapping-of-cooling-measures-fades\/","url_meta":{"origin":86412,"position":4},"title":"Hong Kong property deals fall by a quarter as exuberance over scrapping of cooling measures fades","date":"June 4, 2024","format":false,"excerpt":"\r Hong Kong\u2019s property sales fell by a quarter in May, the latest official data shows, as analysts said the initial exuberance over the lifting of property cooling measures had started to wear off.\r \r Source : South China Morning Post\r Read more...Hong Kong property deals fall by a quarter\u2026","rel":"","context":"In "Property News"","img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":142652,"url":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/peoples-assets-are-disappearing-midland-realty-chairman-sounds-the-alarm-as-he-urges-removal-of-all-hong-kong-property-cooling-measures\/","url_meta":{"origin":86412,"position":5},"title":"People\u2019s \u2018assets are disappearing\u2019: Midland Realty chairman sounds the alarm as he urges removal of all Hong Kong property cooling measures","date":"February 16, 2024","format":false,"excerpt":"\r Hong Kong should do away with property sector cooling measures altogether as declines in real estate values and the stock market are putting Hongkongers\u2019 assets at risk, says the chairman of Midland Realty.\r \r Source : South China Morning Post\r Read more...People\u2019s \u2018assets are disappearing\u2019: Midland Realty chairman sounds\u2026","rel":"","context":"In "Property News"","img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]}],"_links":{"self":[{"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/posts\/86412"}],"collection":[{"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/comments?post=86412"}],"version-history":[{"count":0,"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/posts\/86412\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/media\/86413"}],"wp:attachment":[{"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/media?parent=86412"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/categories?post=86412"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/tags?post=86412"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}