Property Cooling Measures – 29 Sept 2022. What it could mean for Singapore’s property market

So on 29 Sept, the govt announced a series of cooling measures. During my around 6 years in the real estate industry, I would say this is cooling measure 3.5 and I have given a video sharing on two of them before:

*You can also scroll down to watch the video sharing if you are not really a reader*

 

I will segmentize my sharing into three portions – The purpose, direct impact, and potential side effects.

 

𝗣𝘂𝗿𝗽𝗼𝘀𝗲:

 

1. The adjustment of the stress test (ie borrowing limit for both HDB as well as total debt servicing) is to ensure prudency both practically n sentimentally not just for housing but overall borrowing.

It was not unexpected and in fact, the stress test could be adjusted should interest rate continued to rise.

 

2. The second purpose is to control the rising resale HDB prices – especially those big and blockbuster units. Per their data collected during resale application), they would have realised that majority of the record-breaking HDB resale transaction came from private property owners who have deep pockets and willing to offer high price to secure their home.

 

𝗜𝗺𝗽𝗮𝗰𝘁:

 

1. For the purpose of prudency, per MAS data and for most if not all of my clients, most consumers do not max out their loan limit. It is a clear sign that MAS will want to continue to emphasize prudency. So the impact could just be on sentiment than anything else across the property market

 

2. For the purpose of HDB resale prices, it could really put a halt on the blockbuster record-setting price – especially for those bigger HDB units. and importantly, if the desired intent isn’t met, we can almost be certain more measures will be implemented

 

𝗣𝗼𝘁𝗲𝗻𝘁𝗶𝗮𝗹 𝗦𝗶𝗱𝗲-𝗲𝗳𝗳𝗲𝗰𝘁:

 

1. if condo owners decided that they would bite the bullets to right size, sell their condo and rent for 15 mths, this will bring the already high rental market to an even higher price.

 

2. a higher demand to the alternative for the right-sizing property owners – resale EC

 

3. a rise in 4-bedder HDB prices – if the right-sizing above the age 55 decided to go for it.

 

4. If demand (from home dwellers) remains and a drop in supply from the right-sizing home dwellers from condo who have decided to take their unit off the market, prices especially for own stay private resale prices might go up

 

Any property decision needs to be well informed and planned out, especially in an environment of high inflation/interest as well as the geopolitical situation. Importantly, you would also want to ensure that your family has a place to stay and be comfortable. Drop me a note should you like to speak.