With immediate effect, the cooling measures shall take place. Attached are summary of how the ABSD (Additional Buyer Stamp Duty) and LTV (Bank Loan to Value) is adjusted in points.
These bittersweet move is somewhat anticipated yet executed very quickly, causing an overnight uproar of sales over showrooms. These measures should hamper existing buying sentiments and should effectively cool en bloc cycle and foreigners’ interest in Singapore residential market.
As buyers are waiting for the market to dip further with news such as Japanese billionaire Katsumi Tada losing $15.8 million (SGD) on his St Regis penthouse, here are some news that is happening around the world and in Singapore that could make you think a little bit more why waiting might not be the best thing to do.
World Stimulus Plans in order
China stimulus plans
These are some abstracts of what happened just a month odd ago in China, the biggest concerned market in the world.
CHINA DATA: Earlier, sentiment was supported by Chinese data showing consumer inflation remained at 1.4 percent in March, well below the government’s official target. That fueled expectations the central bank might launch new stimulus to fend off deflation. Low inflation is a boon to consumers but a bout of potentially damaging deflation could add to fears about the Chinese growth outlook.
CHINA STIMULUS: “We expect possibly the weakest” growth in China this quarter since the 2008 crisis, “and thus more easing,” Citigroup economist Minggao Shen said in a report.
Japan stimulus plans
NIKKEI RECORD: Japan’s Nikkei 225 closed down 0.2 percent to 19,907.63 after rising above 20,000 for the first since April 2000 during the morning session. The gains were based on expectations for Japan’s economic recovery and brisk corporate earnings, following aggressive monetary stimulus. The benchmark index, however, could not sustain that level as investors turned to take profits.
With any stimulus, there will be more money flowing which supports strong inflation for months to come, especially with markets like China and Japan. Real estate no doubt has always shown and is one of the most preferred asset class to combat against inflation. Continue reading “Singapore Real Estate – Downtrend Unlikely to Continue”
To complete the loop for a sustainable Executive Condominium (ECs) market, Ministry of National Development has introduced 3 primary measures to the EC segment, primarily:-
You can read more from the official source.
How will it affect the EC Market?
This will still primarily drive the 1st timers to purchase at ease and since they have lower cancellation fee, this would allow them to think prudently on their financing capability. Backing out would be less painful for them.
2nd timers would probably rush for existing EC launches prior before today so they would be able to avoid the levy. Again, these pool of purchasers would weed out in the market gradually.
EC developers would also be more careful when it comes to bidding for future EC land when it comes to affordability of EC purchasers since the MSR level came down drastically. We’ll see more competitive land bids for future plots; if not lesser.
Will it affect the Overall Market?
As of current, the primary indicator would still be HDB. With HDB prices tapering and aggressive supplies in the pipeline introduced by the government coming online, this would be the median basis of the fundamentals.
Prices should soften for the resale market for the next two quarters, as we’re experiencing a shift of tide already from the seller to the buyer’s market.
Whilst prices might soften, residential buyers should not expect a drastic drop in pricing as the rental market for residential segment is still active.
If anyone at this point still suspects whether licensed Salesperson in Singapore deserves their fees, they should take a full look at CEA newly released professional service manual released on the 26th of April 2013.
The manual covers many duties and responsibilities of a Salesperson in general and have very comprehensive case scenarios on how a Salesperson could be disciplined. Some snippets on the official introduction of PSM:-
The Practice Guidelines on the PSM aims to promote professionalism and ethical service in the real estate agency industry. It sets out the dos and don’ts to guide real estate salespersons in their work, and the professional practices expected of them. When the PSM is adopted by the industry, consumers will benefit as salespersons are expected to serve their clients in the latter’s interest.
A Work Group, led by CEA, was formed in November 2011 to develop the PSM. The Work Group comprised representatives from the industry associations – The Institute of Estate Agents, Singapore (IEA), the Singapore Accredited Estate Agencies (SAEA) and the Singapore Institute of Surveyors and Valuers (SISV), estate agencies, the Consumers Association of Singapore (CASE) and relevant government agencies such as the Urban Redevelopment Authority (URA) and the Housing & Development Board (HDB). The Work roup completed an initial draft of the PSM in September 2012. Further consultations with a wider group of industry stakeholders were carried out subsequently to finalise the PSM.
The practice guidelines in the manual will officially take effect on 1st of January 2014 and is going to be read with reference to the Estate Agents Act.
This is a great piece of work done by CEA as they show that they understood more of our line of business as compared to when they form up 2 years ago. I strongly recommend the public to go through this manual to understand the heavy responsibilities coming from a professional licensed Realtor in Singapore.
[block type=”download”]You can read the Professional Service Manual Practice Guidelines 1/2013 by CEA here.[/block]My weekly recommended Singapore property news and articles for this week,
Following with the news of the introduction of Buyer’s Stamp Duty, IRAS has came out with the circular to clear up on the property counts and news of some exemption to the new cooling measure introduced on 8th of December 2011.
Citizens of five countries that have free trade deals with Singapore, including the United States and Switzerland, will be treated as Singaporeans for the purposes of the new stamp duty measures. When they buy a private home, Americans, Swiss and nationals from Liechtenstein, Norway and Iceland will be treated the same as Singapore citizens.
This will enable them to avoid the new 10 per cent additional buyer’s stamp duty that foreigners now have to pay when they buy a private home.
Free trade agreements usually ensure that a country’s citizens are accorded certain trade protections when they are in the partner nation.
The tax guide basically spells most of the scenario how the Buyer’s Stamp Duty will work and which cases could apply for remissions. Fellow Realtors are highly encouraged to download and read it through to understand the different scenarios so you could go through with your clients.
URA has just revised the development charges for the following groups:-
The DC rates for Group A (Commercial) have increased by an average of 22%, with the largest increase of 32% in Sector 101 (Paya Lebar Central: Paya Lebar / Eunos / Macpherson Road area).
For Group B1 {Residential (landed)}, the DC rates have on average increased by 17%, with the largest increase of 20% in 22 out of 118 geographical sectors.
The DC rates for Group B2 {Residential (non-landed)} have also increased by an average of 12%. The largest increase is 39% in Sector 57 (Serangoon Road / Whampoa / Bendemeer Road area).
For Group C (Hotel/Hospital), the DC rates have an average increase of 7% with the largest increase of 9% in Sectors 1, 2 & 7(Cecil Street / Boon Tat Street / Robinson Road area), and Sectors 19, 20 & 21 (Havelock Road / Clemenceau Avenue / New Bridge / South Bridge Road / Upper Pickering Street area).
The DC rates for Group D (Industrial / Warehousing Use) has increased by 31% on average, with the largest increase of 55% in Sector 114 (Tuas / Pioneer Road / Jurong / Sungei Kadut / Mandai Estate / Woodlands area) and Sector 115 (Woodlands / Sembawang / Yishun area).
The rest remains unchange.
Official press release can be found here.
There’s a lot of activities going on in the commercial/light industrial real estate scene including both sales and rental market. Would we see another spike in their prices?
This law is finally been enacted.
As mentioned in August 2009, the Government was considering making it compulsory for conveyancing lawyers to have their stakeholder’s funds held by conveyancing accounts in banks.
Under the new measures, lawyers will no longer be allowed to receive and hold conveyancing money in their clients’ accounts. Instead, the money must be held in a conveyancing account in banks appointed by the Ministry of Law. Withdrawal or pay-out of such money will require two-party authorisation.
Violation of the rule will result in a fine of up to S$50,000, imprisonment of up to three months, or both.
Singapore Land Authority (SLA) has also set up a new electronic Payment Instruction (ePI) service to provide a better and more secure environment for lawyers to initiate pay-out instructions and counter-sign digitally, as well as for the appointed banks and SLA to securely process and retrieve instructions.
Such will prevent cases like these from happening. This would boost confidence to our locals as well as our foreign investors of our conveyancing process of procuring a property in Singapore.
Its no surprise that foreign buyers are the ones that is zapping up most of the properties in Singapore, allowing the figures to hit yet another height.
The studies according to DTZ were recorded and reported in Straits Times today surprising previous average figure of 12% over 2010.
FOREIGN home buyers snapped up 16 per cent of all private homes sold in the first quarter – the highest quarterly percentage since data became available in 1995.
Experts say the high foreign proportion in the market is because such buyers have been less affected by the rounds of cooling measures which have muted local interest.
The overseas impact has been telling, according to the DTZ Research report that contains the new buying figures. – more from Straits Times Online
Despite strong cooling measures which should have been affecting their buying decisions, foreign investors see their purchases as a long term investment as they’re unfazed by the seller’s stamp duty measures.
The many reasons why foreigners buy into Singapore include:
The National University of Singapore has developed a new index for Singapore residential homes on month-to-month price movements,
Continue reading “NUS Introduces Singapore Residential Price Index (SRPI)”