PropNex Realty is pushing for the Government to revise property cooling measures it introduced last year. Calling to revise property cooling measures, it asked that changes be made to the additional buyer’s stamp duty (ABSD) and also for a reversion of loan-to-value (LTV) limits.
The real estate services company has submitted the following three recommendations to revise property cooling measures to the Ministry of Finance and the Ministry of National Development:
1. a remission of ABSD for HDB upgraders;
2. a reversion of LTV limits for first housing loans; and
3. a revision of the ABSD rate for locals buying a second property.
Image credit: Youtube
PropNex CEO Ismail Gafoor explained that one reason for these recommendations is the spike the organization saw in the number of returned units in new launches since November 2018.
November 2018 was when most developers launched their projects, after taking stock of the latest property cooling measures that were implemented about four months ago.
Besides the higher return rate for units in new development launches, a 16.8 per cent year-on-year drop in new home sales last year caused concern. This means that developers only sold 8,795 new private homes (excluding executive condos) in 2018 compared to 10,566 in the year before.
In its call to revise property cooling measures, Propnex Realty, which is Singapore’s largest listed real estate agency, said in a press release:
“A multitude of underlying factors such as declining new mortgage loan applications, increasing pipeline supply of private residential units, a lack of ECs on the market and rising number of HDB flats that are reaching the minimum occupation period (MOP) are timely reminders that are prompting for a reasonable cause of action to be taken.”
The first recommendation that PropNex has set out suggests that the authorities should treat “genuine HDB upgraders who are purchasing their first private residential property, in a similar capacity as those who are acquiring an EC, through the allowance of remissions”.
The agency suggested that these buyers should be allowed to undertake to HDB that they will dispose of their existing HDB flat within a period of six months from the Temporary Occupation Permit (TOP) date for new developments or the time of completion for resale properties.
Advocating that this policy should be extended to singles, single-parent families, and singles living with parents, PropNex added that the authorities could install a penalty that gives HDB the powers to repossess the HDB flat if the buyer does not make good on their word, as a means to protect the effectiveness of the policy.
Next, PropNex tackled the current LTV limit rules which state that the LTV limits on a first housing loan is 75 per cent, or 55 percent if the loan term is over 30 years or extends past age 65.
Suggesting that the existing LTV limits should be reversed back to 80 per cent, or 60% if the loan term is over 30 years or extends past age 65, PropNex said: “We feel that with the existence of the Total Debt Servicing Ratio (TDSR) framework is sufficient, in preventing borrowers from being overleveraged, as potential buyers have to adhere to the necessary requirements.”
Mr Gafoor added that this would “give first-time home buyers the ability to enter the market to purchase their first property.”
Finally, in asking to revise property cooling measures, Propnex is asking the Government to revise the current ABSD rate of 12 per cent for a second property purchase to either 5 per cent or 7 per cent for Singaporean buyers.
Mr Gafoor pointed out that many Singaporeans have moved to investing in overseas properties, in nations like Cambodia, Malaysia, the Philippines, Japan, the UK, Australia, Thailand, and Vietnam, and that they prefer properties that cost less than $1 million.
Proposing that the new ABSD rate should only apply to Singaporean Citizens, PropNex said: “We feel that it is necessary for Singaporeans to have the ease of comfort in investing in their own country, instead of venturing into overseas options as a ‘push factor’ due to hefty ABSD rates.”
How to Secure the Best Home Loans Quickly
iCompareLoan is the best infomercial loans portal for home-seekers, buyers, investors and real estate agents alike in Singapore. On iCompareLoan, you will be able to find all the latest news and views, informational guides, bank lending rates and property buying trends, and research data and analysis.
Whether you are looking to buy, sell or refinance apartments, condominiums, executive condos, HDB flats, landed houses or commercial properties, we bring you Singapore’s most comprehensive and up-to-date property news and best home loans trends to facilitate your property buying decisions.
Our trademarked Home Loan Report is Singapore’s first one-of-a-kind analysis platform that provides latest updates of detailed loan packages and helps property agents, financial advisors and mortgage brokers analyse best home loan packages for their clients, so that they may give unbiased home loan/commercial loan analysis for their property buyers and home owners. Our distinguished Panel of Property Agents who are users of our Home Loan report can give the best all-rounded advise to real estate seekers.
All the services of our mortgage consultants are ABSOLUTELY FREE, which means it’s all worth it to secure a loan through us.
Whether it is best home loans, best commercial loans or refinancing of existing loans or SME loans, CONTACT US TODAY!
The post Revise property cooling measures, Propnex CEO urges Government appeared first on iCompareLoan Resources.