So, Singapore rolls out a little New Year's present - one that will very likely benefit Malaysia in generally, specifically properties in the Iskandar region, as well as properties in KLCC. The Singaporean government introduced a rather comprehensive and elaborate set of cooling measures in order to address the re-heating of the Singaporean real estate market.
- Additional Buyers' Stamp Duty (ABSD) rates will rise between 5-7% across the board
This new measures apply to
- permanent residents (PRs) purchasing a private residential property who will pay 5% ABSD for their first private residential property purchase vs. 0% previously and 10% for their second or more private residential property purchase vs. 3% previously
- foreigners and non-individuals buying any private residential property who are now subject to ABSD of 15% vs. 10% previously
- Singaporeans purchasing their second private residential property who will pay 7% ABSD vs. 0% previously and 10% ABSD for their third or more private residential property vs. 3% previously.
- New buyers affected by the ABSD rates will include PRs (for 1st property) and Singapore citizens (2nd property onwards)
- Loan-to-Value (LTV) limits will be lowered by 10-20%.
Three broad changes are being introduced:
- For individuals obtaining a second housing loan, LTV limits that banks are able to grant have been lowered from 60% to 50%. For loan tenures exceeding 30 years or loan period extending beyond the borrower’s retirement age of 65, LTV limits have been lowered from 40% to 30%.
- For individuals obtaining a third or more housing loans, the LTV limits have been lowered from 60% to 40%. For loan tenures exceeding 30 years or loan period extending beyond the borrower’s retirement age of 65, LTV limits have been cut from 40% to 20%.
- For non-individual (e.g companies) borrowers, the LTV limit has been revised from 40% to 20%.
- The minimum cash down payments for housing loans will be raised by 15%.
The minimum cash downpayment required from a buyer (individual) with one or more outstanding housing loans has been raised from 10% of the valuation limit (lower of current property value or purchase price) to 25%. The minimum cash downpayment has not been changed for individual borrowers who do not have any outstanding housing loans currently.
- The Mortgage Service Ratios (MSR) for public housing loans (HDB) will rise by 5%
- PRs will no longer be allowed to sublet entire flats and need to dispose their HDB flats within 6 months of acquiring a private property
PRs were previously allowed to concurrently own a HDB flat and a private residential property as long as they fulfil the MOP for their flats. From 12 Jan onwards, a PR who intends to upgrade to a private residential property will be required to dispose of his/her HDB flat within six months of purchasing a private residential property. This new ruling will not be applied retroactively, i.e. to permits granted before 12 Jan. However, if a PR household buys another private residential property, their HDB flat must be sold within six months.
- The rules of maximum strata floor area, sales of dual-key units and minimum holding period before launch of projects in the Executive Condominium (EC) segment will be revised.
- Private Enclosed Spaces (PES) and Private Roof Terraces (RTs) will be treated as GFA computation
URA has decided to include PES and RTs in non-landed residential developments (including ECs) as part of GFA and they will be subject to development charge and differential premium. Also, they will be subject to the 10% maximum bonus GFA allowed beyond the gross plot ratio (GPR) stipulated in the masterplan.
- Seller's Stamp Duty (SSD) of 5-15% will be imposed on sale of industrial properties.
Effective 12 Jan 2013, the following seller’s stamp duty (SSD) rates will be imposed on industrial properties and land bought and sold within three years of the date of purchase:
- 15% for property sold within first year of purchase;
- 10% if sold in the second year
- 5% in the third year.
So... is the SINGAPORE REAL ESTATE still attractive? Well... we shall see. But one thing for sure is that all these new measures will benefit Malaysian properties. =)