New property cooling measures announced: Higher ABSD rates, tighter loan limits
The July 2018 cooling measure from the Singapore government has taken the country by surprise and shocked many real estate watchers in the market. The cooling measures include the ABSD (Additional Buyer Stamp Duty) increase by 5% and a 5% decrease on the Loan The Value (LTV).
“The government has been monitoring the property market closely. We are very concerned that prices are running ahead of economic fundamentals,” said Mr Lawrence Wong, Minister for National Development on Thursday.
Because Singapore is a small country with a problem of land scarcity the property prices in Singapore cannot afford to crash, therefore it is important and the responsibility of the government to ensure that the property prices in Singapore does not go into the speculative bubble mode. That is the reason why cooling measures have to be in place to deter flippers and speculative demand.
So buyers at this point are buying into the true intrinsic value of the property without the speculative factor. Especially for the new developments where buyers are enjoying tremendous discount from developers who are selling at close to break-even price. That means there is more room for profit for the buyers in the future when they are looking to sell.
Developments that are selling exceptionally well in the CCR like Martin Modern and 8 Saint Thomas is one that you can consider as a collection to your portfolio. These are developments built by an excellent reputable developer, and it comes with a generous land size and are strategically located on good plots of land that will potentially increase in price.
Another ideal development to look at in the RCR would include Amber Park, where it is an inconic one of a kind development sitting on one of the biggest plot of land ever released in district 15 for the past 13 years! Units have been flying off the shelf since it started selling!
Developments worth considering in the OCR would include Whistler Grand, Piermont Grand Executive Condominium, and Riverfront Residences as these developments are highly desirable in their respective districts and priced very close to the developer’s break-even cost. And as consumers, we all know it is essential to buy properties that are highly desirable as this will determine our exit strategy in the future as to whether or not there is profit to be made on the real estate that you have purchased.
In Summary, with the cooling measure in place, buyers can be assured that the property prices now, is an actual reflection of the intrinsic demand and the pricing of the new developments at the moment is very close to the developer’s break even cost. Hence the time to enter into a new development to enjoy the first movers advantage has never been safer.
Source: Channel News Asia
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