SINGAPORE – The deal to buy a $3 million landed property in Yio Chu Kang was supposed to be finalised only on Christmas Day, but Mr Desmond Sim decided to push through with the transaction earlier this month even though it was going to be a hassle as he was going on a trip to South Korea.
That off-the-cuff decision turned out to be a “blessing in disguise”, said the 34-year-old chief operating officer of an asset management company.
A new set of property cooling measures were announced by the authorities on Wednesday (Dec 15) night, just 20 minutes before they kicked in at midnight.
Measures include the raising of additional buyer’s stamp duty (ABSD) that must be paid for purchases of additional properties, tightening of the total debt servicing ratio (TDSR) for borrowers and the lowering of loan-to-value limits for HDB loans.
“If I had waited till Dec 25 to close the deal, I’ll definitely have to come up with more cash so I’m very blessed I closed it earlier this month,” said Mr Sim.
He is still waiting for confirmation on whether the refinancing for his house’s construction loan, which he had just applied for, will be affected, although he said it would be a smaller sum of money involved compared to if his purchase was not completed.
The latest round of cooling measures are aimed at addressing the upward market momentum in prices and transaction volumes, and encouraging greater financial prudence among home buyers, said National Development Minister Desmond Lee in a press conference on Thursday (Dec 16).
“Crucially, our measures seek to prioritise housing purchases for genuine owner-occupation, especially among first-time home buyers. They aim in particular to ensure that affordability in the HDB resale market – as measured by house price to income ratio – remains well below its historical levels,” Mr Lee said.
Home buyers and property agents interviewed by The Straits Times expressed mixed views on the announced measures, with some adopting a wait-and-see approach.
Supply chain director Derrick Chng, 43, said he will be sticking to his asking price of $4 million for his cluster house in Hillcrest Villa, and will keep tabs on the transaction volume and level of interest in the 99-year leasehold project for the time being.
“I’m not in a hurry to sell, so I’m giving myself two to three months to see how the market reacts and assess buyers’ interest before I make any adjustments to my asking price,” said Mr Chng.
ERA Realty property agent Andass Teu, 42, said a client of his had originally intended to buy a $2 million private property before selling his HDB flat at the Pinnacle @ Duxton.
But the increased ABSD rate has now put a damper on the plans, as it would require him to come up with an extra $200,000 in cash upfront to pay the stamp duties. Mr Teu said his client intends to sell before buying the private property.
“There will be more people who now have to sell first before buying, so this will push up the short-term rental demands or more sellers will request for temporary extension of stay while they search for their next house,” said Mr Teu.
PropNex property agent Shawn Khoo, 43, said he has received at least two inquiries from prospective buyers on which properties they should be looking at and if it is the right time to enter the market.
“People are waiting to see how the curbs will soften the stance of sellers and if they will make price adjustments. Even if they don’t move on their prices, buyers now have more leeway and bargaining power compared to yesterday,” said Mr Khoo.
“Prices should be more manageable in the coming months, with more breathing room for buyers who previously had to rush to make an offer within two to three days of viewing or risk losing out on the deal,” he added.
Some well-heeled buyers, however, are seemingly pressing on with their property purchases.
Singapore Realtors Inc property agent Lester Chen, 40, who deals mainly in luxury private properties for high net worth individuals, said his foreign buyers are going ahead with viewing and purchasing, even after the increased ABSD for foreigners.
“Instead of a $40 million super penthouse, maybe they’ll downsize to a $30 million penthouse to compromise on the increased ABSD rate, but it doesn’t seem like it’s stopping them from buying,” said Mr Chen, who added that he has around five such transactions that are close to completion.
“To this group of buyers, – and not to sound haughty – but $5 million to $6 million is not much more if they find something that they like.”
- Additional reporting by Bryan Cheong and Rosalind Ang
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