Every few weeks, there would be some news about Singapore’s cooling measures. The question of whether relaxation should start or would it still be maintained. Just two weeks ago, this was what the CEO of Capitaldn Ltd said Cooling measures in SG? One more year at least says Capitaland Ltd Then on 10th March, there was a joint statement by Singapore’s Ministry of Finance, Ministry of National Development and Monetary Authority of Singapore on relaxation of cooling measures in Singapore. Here’s one article from StraitsTimes: Singapore eases some property cooling measures. What has happened is that the sellers who sell from year 4 onwards no longer need to pay any stamp duty. Secondly, the rate was also lowered by 4 percent across the board. Instead of 16 percent, it will now be 12 percent for buyers who sell within 1 year. This goes on until the more than 2 but less than 3 years which has been reduced from 8 percent to just 4 percent. Do note that this is stamp duty. In other words, the percentage is based on the selling price and not on the property gains derived from the sale. For Malaysia, just 3 months back, this would be the view of analysts. Analysts on Budget 2017: Cooling measures unlikely to be lifted
There was also an exemption for a small group of borrowers where Total Debt Servicing Ratio (TDSR) was concerned. TDSR of 60 percent is currently required for bank borrowings. In brief, the total loan obligations must NOT exceed 60 percent, else the loan application will not be approved. This is a parting statement for the all other current cooling measures. The Singapore Government said the bulk of current property measures “remain necessary to promote a sustainable residential property market and financial prudence among households.”
Relaxation of more of the cooling measures would be positive for the property market. However, this is not a sign that the economy is doing better. In fact, it may be due to the slowing down of economic growth and thus some support to the market is now needed. Singapore’s GDP growth for 2017 is estimated to be at 1.5 percent in a survey by the Monetary Authority of Singapore just three months back. Read StraitsTimes article here. Unemployment rate is going to be low still, at around 2 percent. Read Businesstimes article here. When people have jobs, they will still spend and definitely buy properties. This is a positive point. Happy following.
written on 11 Mar 2017
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