Pvt Property: Singapore Govt. Implements New Rules to Curb Property Speculators

Two new rules have been rolled out in an attempt to curb speculation in the private property market and stabilize prices.

  1. Lending institutions can lend only up to 80% of the value of the property
  2. Stamp duty of 3% will be levied on those who sell the property within a year of buying it

Despite the move, it’s believed that it’ll provide only a temporary respite as buyers pause and take stock.

Some analysts believe that most buyers were not planning on  taking the maximum 90% loan anyway. Banks are less willing to take risks due to the recent economic crisis and charge higher interests to those who wanted to take the full 90% loan. As such, buyers have been prepared to borrow less.

Mid to long-term speculators who expected a holding period of two or more years will not be deterred as well.

The ones who are expected to be most affected by the new laws are the ‘upgraders’ – those who are moving up from HDB flats to condominiums. They’re typically the ones who borrow the maximum 90%.

The new laws do not affect the HDB resale market.

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