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Additional cooling measures will completely demolish speculation
Singapore Property Market News and Analysis

Latest Property Real Estate News - Published on 13/01/2011
Less than two quarters after the Government introduced a slew of measures to cool the real estate market, more measures have been announced to further rein in any possibility of a property bubble from forming.
The holding period for the imposition of Seller's Stamp Duty (SSD) has been increased from the current three years to four years. On top of that, the SSD imposed on properties sold within the first year is 16%, with 4% decreases till 4% in the fourth year. The other cooling measure was the reduced Loan-To-Value (LTV) limit for individuals from 70% to 60%, and to 50% for corporations.
"These latest measures are a liitle premature," feels PropNex CEO Mr Mohamed Ismail, " as we would not really have had sufficient time to assess the effects of the previous measures."
Mr Ismail expects the lower LTV to psychologically cripple many investors' minds. Besides investors, many genuine HDB owners wih an existing mortgage will find it difficult to fork out the 40% cash for their new property, especially if they are upgrading to a condominium or other private property. This is because HDB dwellers, he points out, are mainly in the lower to middle income groups.
As for the lowered LTV for companies to 50%, Mr Ismail says that this was introduced because many individuals were incorporating companies to circumvent the previously introduced lower LTV of 70%.
"Of the three measures announced," Mr Ismail, "the increased holding period for the imposition of SSD is likely to have the least impact, despite the dramatic increase of the SSD by over five times. This is due to the fact that, since the SSD was introduced on 30 August 2010, many investors were already buying wit a mid- to long-term view."
"However, the greatest impact will not come from the measures themselves," concludes Mr Ismail, "but from the recency after the last slew of measures. The relatively short time between the measures will probably reduce investor confidence and have them asking: What's next?"
For enquiries, please contact:
Mohamed Ismail (CEO)                                      9487 1414
Adam Tan (Corporate Communications Manager)            9006 8726

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