KBW's New Cooling Measures Will Not Work

[mojito]

The writer overlooked the other important change, regarding 40% per cent cash instead of 20%.

• If they have no outstanding mortgage, the cash down payment is now 40 per cent of the property's valuation instead of the usual 20 per cent.

• If they already have an existing mortgage and want to take another one for another property, the cash down payment is 60 per cent, instead of the current 40 per cent.

That WILL affect those who do not have sufficient cash. 40% to 60% cash is significant to most people.

http://www.straitstimes.com/breakin...gage-rules-may-deter-older-investors-20121006

Thank you for the clarifications. Time to dump bank stocks!

 

[kingrant]

To say that the govt knows what it is doing is really giving them too much credit.

KBW knows shit about the housing market, and its problems. He should stick to his $8 Health Ministry.

Nobody in the Cabinet knows anything about our problems.

 

[Loofydralb]

The writer overlooked the other important change, regarding 40% per cent cash instead of 20%.

• If they have no outstanding mortgage, the cash down payment is now 40 per cent of the property's valuation instead of the usual 20 per cent.

• If they already have an existing mortgage and want to take another one for another property, the cash down payment is 60 per cent, instead of the current 40 per cent.

That WILL affect those who do not have sufficient cash. 40% to 60% cash is significant to most people.

http://www.straitstimes.com/breakin...gage-rules-may-deter-older-investors-20121006

Aww shucks. How many % of those who bought property during the last 6 month would be affected if this was implemented then? 1%~2%?

That would be insignificant to cause a dent in the housing values. I have not got started on how to circumvent this measures. Believe me, people are already discussing how to go around this and previous measures. There are loopholes everywhere.

I still make my stand that they(the govt) do know what the the precise effects of these cooling measures would be on the market.

What they don't know is how the basic policy of housing market should be framed, both for the short and long term and taking into accout all factors that affect Singapore.

 

[mojito]

With the additional information sense had posted from ST, it looks like demand will dry up for mass-market condo units and HDB resale flats.

It is quite a drastic measure to double the downpayment amount for housing loans. A new mortgage for a condo valued at 800k will now require 320k in cash, instead of 160k. It is a very substantial amount of cash for first time buyers as well as speculators to fork out.

Looks to me Khaw isn't afraid to offend some big balls in the property development space. I am pretty optimistic about the new measures actually. If a property consultant firm, which has a vested interest in more property units changing hands, suddenly becomes concerned about the plebs and criticize the government's new policy for not damaging their own year-end bonuses enough, frankly I think this is a hard-hitting move on speculators and their enablers deserving of praise.

 

[eErotica69]

Khaw can have all the cooling measures till the cow comes home. At the end of the day is the results that counts.

 

[soikee]

With the additional information sense had posted from ST, it looks like demand will dry up for mass-market condo units and HDB resale flats.

It is quite a drastic measure to double the downpayment amount for housing loans. A new mortgage for a condo valued at 800k will now require 320k in cash, instead of 160k. It is a very substantial amount of cash for first time buyers as well as speculators to fork out.

Looks to me Khaw isn't afraid to offend some big balls in the property development space. I am pretty optimistic about the new measures actually. If a property consultant firm, which has a vested interest in more property units changing hands, suddenly becomes concerned about the plebs and criticize the government's new policy for not damaging their own year-end bonuses enough, frankly I think this is a hard-hitting move on speculators and their enablers deserving of praise.

No sir, no matter what kind of cooling measures they introduce, property price in S'pore will not come down unless they immediately shut the gate to take in more foreign trash.

Our mass property market is well supported by these new foreign trash and they have no problem to pay up even in cash.

 

[zeddy]

bro, this assholes neither naive or plain dumb, it's simply a dog, perhare a pap's dog..

Bro Boring, these Pro PAP Gong Cheebyes should jolly open up their eyes fast and realise that things are going downhill in Spore. They should stop pretending that things are so rosy and the people are happy in this fucked up crammed island..

 

[chupacabra]

The rich will always have the money no matter how much the downpayment is. Its those sinkees who have little in savings and cpf that will suffer even more. Even if you get straight As and come from ivy league uni, you cant afford to but a flat if your parents have no money to lend you. Sinkees are fucked....or rather fuck again.

 

[Bigfuck]

Can work. Meant for stupid SGPoreans who cannot count and want to speculate like the fucking shitheads of Penang who flip property with no money. Super corrupt rich from overseas unaffected. They can pay 10million in cash in your face.

 

[kingat33]

The writer overlooked the other important change, regarding 40% per cent cash instead of 20%.

• If they have no outstanding mortgage, the cash down payment is now 40 per cent of the property's valuation instead of the usual 20 per cent.

• If they already have an existing mortgage and want to take another one for another property, the cash down payment is 60 per cent, instead of the current 40 per cent.

That WILL affect those who do not have sufficient cash. 40% to 60% cash is significant to most people.

http://www.straitstimes.com/breakin...gage-rules-may-deter-older-investors-20121006

maybe the writer is actually afraid of property price crashing which will happen

 

[TuaBui]

http://wikitemasek.org/what-does-the-recent-hdb-loan-changes-mean-to-singaporeans/

I will state here categorically that cooling measures announced on 5th Oct 2012 will not work. Simply because it affects nobody at all. Most people take, at the maximum, 30-years loan. It is very very rare owners will take a 35-years loan.

But why did KBW do it at all?

It seems evidently clear that our Ministers take us for granted as fools and able to run rings around us. So it is up to citizens to decide, are these the types of Ministers that we want? They would change policies just to shut the people up.

It is quite similar to what the PM did when he reviewed the salaries of MPs and Ministers. At the end of that, they were back at square one. They did not even come close to what the citizens demanded, which was a substantial cut.

So now it seems that PAP is hell-bent on wanting the prices of housing to sky-rocket. Some of you may doubt this. But just take a look at the past cooling measures. Did any one of those worked? None of them did. Is that because, PAP did not know what to do? Of course not. PAP exactly knew what they were doing. They gave the impression they were doing something but in actual fact they knew the measures would be at best cause a ripple only.

For the young people, be forewarned. You will have a hard time buying and owning a home. For parents of these people, wake up. Your children will forever be dependent on you for their housing needs. This is definitely not a situation we want for our future. Show your displeasure in 2016. Make the PM accountable. He will have to make his MND Minister also accountable. MBT felt the effects of that accountability.

Lastly I would have preferred that KBW did not roll out this last measure. He seems afraid of the industry.

Worst, he treats us condescendingly.

Simi LanJiao ??? Since when ???
i repeat , since when has our Cooling measures work ???
All these talk cock and sing songs are meant to
show and be seen.
Imagine this scenario : Every Father , Mother , Son and Daughter
who is eligible will own a Flat or Condo or Pte Pty.
Who do you think these FMSDs will Vote for in 2016 ???
35 years loan tenure is a done deal . Come 2015/2016
get ready for 50 year loan tenure ( for your kids only )

 

[TuaBui]

Simi LanJiao ??? Since when ???
i repeat , since when has our Cooling measures work ???
All these talk cock and sing songs are meant to
show and be seen.
Imagine this scenario : Every Father , Mother , Son and Daughter
who is eligible will own a Flat or Condo or Pte Pty.
Who do you think these FMSDs will Vote for in 2016 ???
35 years loan tenure is a done deal . Come 2015/2016
get ready for 50 year loan tenure ( for your kids only )

SINGAPORE: Latest measures to cool the property market announced on Friday have prompted some buyers to seal last-minute deals, before the new rules kick in.

From Saturday, buyers who opt for home loans over 30 years, or past the retirement age of 65, will have to fork out significantly more cash.

Older investors, like 60-year-old Madam Doris Lim, are the hardest-hit by the latest restrictions on home loans.

"I heard the news (yesterday)... so I called my bankers. The manager came down to collect my documents," she said.

Madam Lim bought a condo in Sengkang for S$850,000.

If she had waited one more day, she would have had to pay 60 per cent of it in cash, instead of the usual 40 per cent.

That is a S$170,000 difference.

Over at Yishun, a new project also saw strong sales on Friday.

The Skies Miltonia condominium was launched on the same day the cooling measures were announced. Before the night was over, more than 60 per cent of the units had already been sold.

"It was slightly above our expectations... you're talking about 200 over units," said Mr Leow Ban Leong, the condominium's developer.

But Mr Leow said most of them were not last-minute deals.

"The news only came out in the evening. By that time, around 80 to 90 per cent of our sales had already been done," he said.

Most of the shoppers at the launch were families looking for their second or even third property.

With curbs on long mortgages, shorter loans also mean buyers have to pay higher monthly instalments.

Mr Lee Mun Teck, an engineer, said: "Even though the interest rate is low, people will look at affordability right now instead of just the interest rate."

But not everyone is affected.

Madam Soh Hwee Gin, who is currently servicing one home loan, said: "We are not risk-takers, so for us we have parked aside much more funds."

Developers said there will be some impact, but they are expecting sales to stay healthy, as there are genuine buyers with sufficient cash in the market.

- CNA/cc

 

[chonburifc]

Don't know whether to be happy or not. Bought a resale 3 room pigeonhole for around 100K in a matured estate in the late 90s and fully paid by myself (sole) during 06 or 07. Was able to do that because amount not big then. Only took 60K loan.

Really pity the young couples who are just starting out. Now, 3 room pigeonhole also cost around 300K, even couple (2 person paying) also quite siong. Worst is salary never go up 2-3 times.

 

[sirus]

True blue Malaysian

Ar....Then I reckon outsider smoke cigars.

 

[I_Hate_Pappies]

Don't know whether to be happy or not. Bought a resale 3 room pigeonhole for around 100K in a matured estate in the late 90s and fully paid by myself (sole) during 06 or 07. Was able to do that because amount not big then. Only took 60K loan.

Really pity the young couples who are just starting out. Now, 3 room pigeonhole also cost around 300K, even couple (2 person paying) also quite siong. Worst is salary never go up 2-3 times.

Your empathy is what the pappies and their dogs are lacking of.

 

[chonburifc]

Your empathy is what the pappies and their dogs are lacking of.

Once I attended a house warming party of an ex-colleague who bought an executive unit at CCK. Was so impressed with the flat until eyes red red. Sekali found out every month, both husband and wife have to top up cash cos' total CPF contributions not enough and that continued for many years until the principal reduced. And this makes me wonder when can sinkees ever met the Minimum Sum requirements.

Machiam like eat bad durians like that. Outside look nice, inside don't taste nice (好看不好吃）.

 

[makapaaa]

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http://wikitemasek.org/what-does-the-recent-hdb-loan-changes-mean-to-singaporeans/

What does the recent HDB loan changes mean to Singaporeans

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HDB prices are still rising despite the slew of cooling measures taken up by the HDB and MAS. Currently, supplies of new flats have been ramp up and an Additional Buyer’s Stamp Duty of 3% over the higher-value property have been imposed. These measures however have proven ineffective as the HDB resale prices continue to climb a further 2 percent in the recent quarter-to-quarter report. The latest changes to curb rising property prices is adopted by the Monetary Authority of Singapore and it:

1) Limits mortgage loans to a maximum of 35 years
2) Decreases the Loan-to-Value(LTV) ratio for loans exceeding 30 years

You may read the exact details of the new housing loan ruling here [Source]

The above measures are steps in the right direction but it could spell disastrous if the housing prices do not drop.
Singaporean HDB flats buyers will:

a) either need to pay more in cash or CPF for deposits in order to lengthen the borrowing period
b) or pay more in cash or CPF for monthly mortgage loans in order to shorten the borrowing period

Either way, both options put HDB flats buyers to pay more in the short term. It brings a question if the HDB is short of cash? This is worrying because somewhere in the national coffers could be leaking in order to warrant a drastic measure that looks like the HDB is desperate for cash. Did Temasek Holdings lose money again?

Nonetheless, the impact will be disastrous if the HDB prices doesn’t come down because the effect is equally disastrous suppose prices remain stagnant. With reference to the two options, if the HDB prices do not come down, young married couples:

a) will delay marriage and baby plans in order to save for higher deposits
b) will have to pay cash to top up the outstanding mortgage loans which will most likely exceeds their monthly CPF contribution given the increased mortgage loan due to the shortening of borrowing period. Some owners may even go homeless if they become unemployed and lose their CPF contributions.

67981.1

http://wikitemasek.org/what-does-the-recent-hdb-loan-changes-mean-to-singaporeans/
What does the recent HDB loan changes mean to Singaporeans
--------------------------------------------------------------------------------

HDB prices are still rising despite the slew of cooling measures taken up by the HDB and MAS. Currently, supplies of new flats have been ramp up and an Additional Buyer’s Stamp Duty of 3% over the higher-value property have been imposed. These measures however have proven ineffective as the HDB resale prices continue to climb a further 2 percent in the recent quarter-to-quarter report. The latest changes to curb rising property prices is adopted by the Monetary Authority of Singapore and it:

1) Limits mortgage loans to a maximum of 35 years

2) Decreases the Loan-to-Value(LTV) ratio for loans exceeding 30 years

You may read the exact details of the new housing loan ruling here [Source]



The above measures are steps in the right direction but it could spell disastrous if the housing prices do not drop.

Singaporean HDB flats buyers will:

a) either need to pay more in cash or CPF for deposits in order to lengthen the borrowing period

b) or pay more in cash or CPF for monthly mortgage loans in order to shorten the borrowing period



Either way, both options put HDB flats buyers to pay more in the short term. It brings a question if the HDB is short of cash? This is worrying because somewhere in the national coffers could be leaking in order to warrant a drastic measure that looks like the HDB is desperate for cash. Did Temasek Holdings lose money again?



Nonetheless, the impact will be disastrous if the HDB prices doesn’t come down because the effect is equally disastrous suppose prices remain stagnant. With reference to the two options, if the HDB prices do not come down, young married couples:

a) will delay marriage and baby plans in order to save for higher deposits

b) will have to pay cash to top up the outstanding mortgage loans which will most likely exceeds their monthly CPF contribution given the increased mortgage loan due to the shortening of borrowing period. Some owners may even go homeless if they become unemployed and lose their CPF contributions.



As these moves are really risky, the PAP government better ensure this works or else it will worsen existing problems to a stage where housing prices continue rising and people either start over-stressing themselves to save more in the short term to top up the cash difference or give up altogether the idea of home ownership. The low interest environment in Singapore is somewhat hinted by the Finance Minister that it is here to stay for at least the next few years. This is however seriously jeopardizing people’s retirement as the CPF continues to pay interest rate(2.5%) below inflation rate(3% to 5%).

All these seems to fit into the same old picture that the overcrowded nation simply have too many Permanent Residents and New Citizens competing for a limited resource(housing in this case). The effects of overcrowding on housing is rising property prices, and when the Prime Minister tells you Singapore can take 10% more people by 2016, we should expect to see property prices rising at least a few percentage point more in the coming years. The root cause of all these cooling measures is an overpopulation, or unpopularly, the influx of foreigners. Quick fixes like the one above doesn’t addresses the fact that amenities are simply insufficient to contain such a capacity demanded by the PAP in order to get more votes from new citizens to keep them in power. It is all about political domination and the PAP’s survival for the next 55 years, and this Singapore wouldn’t be a pretty sight in the years to come.

.

 

[makapaaa]

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[TD="class: msgDate, width: 30%, align: right"]Oct-5 11:17 pm [/TD]

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[TD="class: msgTname, width: 68%"] WikiTemasek <NOBR></NOBR>[/TD]
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[TD="class: msgtxt"]It means decent hard working citizens are screwed again! Foreigners from all over the world can still buy with cash whatever they can buy in your little red dot! (OH by the way PRs are NOT CITIZENS)_________________________________________________________________ when the government open up the property marke to the world! and as such non-citizens from the whole world can come in to buy and compete with your citizens! SO can you imagine if you are a citizen who do not qualify for HDB or if you think you want to upgrade, you are SCREWED AGAIN! _____________________________________________________ Now the temporary respite in rising prices will make it more affordable for foreigners! for your citizens the prices are already at all time high and if curbs loans , how to buy anything? So citizens are screwed again!
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[Loofydralb]

True blue Malaysian

So my initial reading of your background from the way you wrote was correct. That explains why you will never be a citizen nor understand Singaporeans grit under intense political abuse.

 

[ionzu]

With the additional information sense had posted from ST, it looks like demand will dry up for mass-market condo units and HDB resale flats.

It is quite a drastic measure to double the downpayment amount for housing loans. A new mortgage for a condo valued at 800k will now require 320k in cash, instead of 160k. It is a very substantial amount of cash for first time buyers as well as speculators to fork out.

Looks to me Khaw isn't afraid to offend some big balls in the property development space. I am pretty optimistic about the new measures actually. If a property consultant firm, which has a vested interest in more property units changing hands, suddenly becomes concerned about the plebs and criticize the government's new policy for not damaging their own year-end bonuses enough, frankly I think this is a hard-hitting move on speculators and their enablers deserving of praise.

agree with you. those with vested interests are definitely feeling the heat and are coming all out to wage a misinformation campaign against the latest measures.

SINGAPORE: Latest measures to cool the property market announced on Friday have prompted some buyers to seal last-minute deals, before the new rules kick in.
Older investors, like 60-year-old Madam Doris Lim, are the hardest-hit by the latest restrictions on home loans.

"I heard the news (yesterday)... so I called my bankers. The manager came down to collect my documents," she said.

Madam Lim bought a condo in Sengkang for S$850,000.

If she had waited one more day, she would have had to pay 60 per cent of it in cash, instead of the usual 40 per cent.

That is a S$170,000 difference.

buyers like madam lim are screwed as the demand from speculators dry up. she's going to be locked in for a long time.

this is the first of more bitter medicine to come as the government tries to moderate the effects of excess liquidity.