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Singapore moves to cool down property market

Posted on 14 Sep 2009 | Comments Off

Singapore on Monday announced measures to curb speculation in the red-hot property market after warnings that a new housing bubble might be forming.

The Ministry of National Development signaled it was ready to sell more state land for property projects, and announced an end to bank loan schemes that let buyers put down just 10 or 20 percent of a home’s assessed value.

“Demand for uncompleted private housing units has picked up strongly since February 2009,” the ministry said in a statement.

The 10,017 units sold by developers in the first seven months of 2009 had already exceeded the 4,260 units sold for the whole of 2008, the ministry’s statement said.

Singapore’s economy is officially forecast to shrink by four to six percent in 2009, but the city-state is now technically out of recession and back on a growth path.

Analysts say the current property frenzy is largely driven by people who were unable to buy homes when prices spiralled in 2007 and then again in 2008 when a global banking crisis exploded.

After Monday, the Monetary Authority of Singapore will no longer allow developers to offer cut-price mortgages such as interest-only loans for uncompleted residential projects, the government statement said. Continue reading →

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S’pore govt acts to cool property market

Posted on 14 Sep 2009 | Comments Off

Singapore’s Minister for National Development Mah Bow Tan has just announced measures for a ‘stable and sustainable property market’.

Among other things, his Ministry will resume selling land under the confirmed list in the first half of next year. Such land sales were suspended in October last year in the aftermath of the global financial crash. The Government will also include sites for executive condos, a hybrid between public and private housing, in the confirmed list to offer more housing choices.

Secondly, the Government is banning interest absorption scheme (IAS) and interest-only housing loans (IOL) with immediate effect, i.e. Sept 14, 2009. This measure will apply to all private residential projects. The only exception will be uncompleted private residential projects where units had already been offered for sale under IAS before Sept 14.

Interest-only housing loans will be disallowed with immediate effect. ‘These schemes could encourage property speculation in a buoyant market where prices are rising rapidly, as they are forms of housing loans that entirely eliminate or substantially lower regular instalment payments for property purchasers in the first few years before the properties are completed,’ a statement by the government said. Continue reading →