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This is probably only my second post on property, as I am still a greenhorn who is observing the market and trying to understand the intricacies of this very interesting investment class. The reason for this (timely) post is mainly due to the recently announced new property cooling measures by Mr. Lee Hsien Loong at the National Day Rally on August 30, 2010. These measures were the direct result of the relentless increase in property prices since the middle of 2008, when the global financial crisis had hit the Singapore economy with full force.
The Government had witnessed HDB resale prices moving upwards and hitting new all-time highs, even as manufacturing and output dropped off a cliff. This apparent dislocation between economic stagnation and property price rises had more than one person complaining bitterly, while speculators were eagerly loading up on properties with the hope of making a quick buck. In spite of two rounds of cooling measures implemented by the Government in the last 1.5 years, including increase the Minimum Occupation Period (“MOP”) for resale HDB flats from 1 year to 3 years, prices continued to escalate and for 2Q 2010 had hit new all-time highs. The cacophony of voices (mainly from young couples who were getting married and were buying HDB for the first time) asking for some action to be taken grew louder as the months passed; which culminated into the new measures announced close to the tail end of August 2010.
So just what are these measures? First off, those who are holding a private property have to sell it off within 6 months should they buy a non-subsidized HDB flat; and this is one of the most stringent laws which I had heard of to date. This effectively shuts people out from buying a resale HDB flat if they own a private property, as they will then be “forced” by the law to dispose of their private property.
I guess this rule was intended to chase out speculators who intended to purchase resale HDB flats for investment or rental, rather than for genuine occupation purpose. However, this creates problems for people with genuine intentions to buy another flat for their parents or children to stay in, for example. Under such a rule, they thus cannot register the resale HDB under their name or they would be forced to give up their private property. Hence, the resale HDB flats have to be purchased in another person’s name. This can be onerous and troublesome even if the funds are not coming directly from the registrant’s account, and would cause headaches for those intending to buy non-subsidized HDB for their relations (assuming their income busts the S$8,000 ceiling). Read more...[caption id="attachment_2262" align="alignright" width="150" caption="Photo by woodleywonderworks"][/caption]
This is probably only my second post on property, as I am still a greenhorn who is observing the market and trying to understand the intricacies of this very interesting investment class. The reason for this (timely) post is mainly due to the recently announced new property cooling measures by Mr. Lee Hsien Loong at the National Day Rally on August 30, 2010. These measures were the direct result of the relentless increase in property prices since the middle of 2008, when the global financial crisis had hit the Singapore economy with full force.
The Government had witnessed HDB resale prices moving upwards and hitting new all-time highs, even as manufacturing and output dropped off a cliff. This apparent dislocation between economic stagnation and property price rises had more than one person complaining bitterly, while speculators were eagerly loading up on properties with the hope of making a quick buck. In spite of two rounds of cooling measures implemented by the Government in the last 1.5 years, including increase the Minimum Occupation Period (“MOP”) for resale HDB flats from 1 year to 3 years, prices continued to escalate and for 2Q 2010 had hit new all-time highs. The cacophony of voices (mainly from young couples who were getting married and were buying HDB for the first time) asking for some action to be taken grew louder as the months passed; which culminated into the new measures announced close to the tail end of August 2010.
So just what are these measures? First off, those who are holding a private property have to sell it off within 6 months should they buy a non-subsidized HDB flat; and this is one of the most stringent laws which I had heard of to date. This effectively shuts people out from buying a resale HDB flat if they own a private property, as they will then be “forced” by the law to dispose of their private property.
I guess this rule was intended to chase out speculators who intended to purchase resale HDB flats for investment or rental, rather than for genuine occupation purpose. However, this creates problems for people with genuine intentions to buy another flat for their parents or children to stay in, for example. Under such a rule, they thus cannot register the resale HDB under their name or they would be forced to give up their private property. Hence, the resale HDB flats have to be purchased in another person’s name. This can be onerous and troublesome even if the funds are not coming directly from the registrant’s account, and would cause headaches for those intending to buy non-subsidized HDB for their relations (assuming their income busts the S$8,000 ceiling). Read more...
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This is probably only my second post on property, as I am still a greenhorn who is observing the market and trying to understand the intricacies of this very interesting investment class. The reason for this (timely) post is mainly due to the recently announced new property cooling measures by Mr. Lee Hsien Loong at the National Day Rally on August 30, 2010. These measures were the direct result of the relentless increase in property prices since the middle of 2008, when the global financial crisis had hit the Singapore economy with full force.
The Government had witnessed HDB resale prices moving upwards and hitting new all-time highs, even as manufacturing and output dropped off a cliff. This apparent dislocation between economic stagnation and property price rises had more than one person complaining bitterly, while speculators were eagerly loading up on properties with the hope of making a quick buck. In spite of two rounds of cooling measures implemented by the Government in the last 1.5 years, including increase the Minimum Occupation Period (“MOP”) for resale HDB flats from 1 year to 3 years, prices continued to escalate and for 2Q 2010 had hit new all-time highs. The cacophony of voices (mainly from young couples who were getting married and were buying HDB for the first time) asking for some action to be taken grew louder as the months passed; which culminated into the new measures announced close to the tail end of August 2010.
So just what are these measures? First off, those who are holding a private property have to sell it off within 6 months should they buy a non-subsidized HDB flat; and this is one of the most stringent laws which I had heard of to date. This effectively shuts people out from buying a resale HDB flat if they own a private property, as they will then be “forced” by the law to dispose of their private property.
I guess this rule was intended to chase out speculators who intended to purchase resale HDB flats for investment or rental, rather than for genuine occupation purpose. However, this creates problems for people with genuine intentions to buy another flat for their parents or children to stay in, for example. Under such a rule, they thus cannot register the resale HDB under their name or they would be forced to give up their private property. Hence, the resale HDB flats have to be purchased in another person’s name. This can be onerous and troublesome even if the funds are not coming directly from the registrant’s account, and would cause headaches for those intending to buy non-subsidized HDB for their relations (assuming their income busts the S$8,000 ceiling). Read more...
