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Category: Real Estate Firms

Singapore Government policies effect on its real estate

According to Savills, the price of high-end homes fell slightly by 0.2% in Q1 2017. This brought it to an average of US$ 1, 631. This continued decline in house price is as a result of deliberate government policies. Before the 2008 global economic crisis, Singapore market experienced an overheated market with residential property price index rising to 38.2% in one year. Since then, the government sensibly began to impose measures which continue mitigate similar future scenarios.
Below are some of the actions the state enacted in the recent years to cool down real estate prices in Singapore.

Higher stamp duties to short-time home buyers

To an average property buyer, buying a home is a long-time investment. However, most real estate investors aim at selling the property in the shortest time possible. To discourage such type of buyers, the government has put in place several seller stamp duties which only impact those aiming to buy a home in less than four years.

Loan repayment must not exceed 60% of the borrower monthly income.

This policy, established in 2013, means that if a home buyer earns an SGD 10,000 per month, the monthly loan payment must not exceed SGD 6,000 per month. In Singapore, loan interest is influenced mainly by SOR interest rates plus how much one borrows. This policy also in aiming at reducing consumer ability to acquire multiple loans where majority rush to make a purchase based on speculated market trend and later unable to repay. The policy is the contributing factor why real estate prices have declined in the last 13 quarters since its enforcement in 2013.

Higher stamp duty on any purchased property

When one buys a property, he or she is now required to pay a higher stamp duty: 1% for purchase of up to $180,000, 2% for the next $180,000 and 3% for the remaining amount. Therefore, if you want to buy a property worth $500,000, then you have to pay the government $9,600 in stamp duties. These stamp duties are now payable after three years of purchase with the rate cut down to 4% for each tier.
The above market-cooling measures have been active as mirrored by the 11% decline in Singapore property prices in the last three years.

Future real estate price projections

The low-interest trending rates continue to play a part, but some of the measures discourage other, especially those buyers looking to rent out their property. Also, buying a condo in Singapore is not cheap, a meter squared will cost approximately US$13,500 in the core regions.
However, the majority of expert expect the real estate price to continue going down with the government not willing to budge despite pressure from investors. If this trend is maintained, a home purchase will be more comfortable for young professionals and families looking forward to purchasing their first home. Same concession will be extended to a selected group of buyers such as married couples with one spouse who are looking to buy their second home as long as they intend to sell their first residential property.…

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Type of Properties That Reliable Property Firms Offer

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