Further measures introduced to cool property market
The Singapore government on Monday introduced more measures to cool the buoyant property market.
These include raising the holding period for which a home seller must pay a stamp duty and reducing the maximum bank loan amount for existing home owners who want to buy another property.
The measures, which take immediate effect, came as a strong economy and low borrowing rates have continued to push property prices up, sparking concerns of a property bubble.
Private property prices shot up by some 11 per cent in the first half of this year and have now exceeded the previous peak in 1996.
National Development Minister Mah Bow Tan said prices are “on the high side”.
He said: “If the current momentum in the market continues, what will likely happen is that a property bubble will form. And when the bubble burst, and not if, but when the bubble burst, there will be severe implications for individuals, as well as for the economy on the whole.”
So the government has moved to curb speculation and also encourage financial prudence among buyers.
The holding period for the seller’s stamp duty has been increased from one to three years to discourage home owners from flipping. The seller’s stamp duty was first introduced in February this year.
Another measure will impact those who have one or more outstanding housing loan. Home buyers who already have at least one mortgage will have to pay more cash upfront when buying their next property.
The minimum cash payment has been doubled from five per cent to 10 per cent of the home’s valuation, while the maximum bank loan amount has been reduced from 80 to 70 per cent.
The government said the objective of the measures is “to ensure a stable and sustainable property market where prices move in line with economic fundamentals”.
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