Is Lentor Mansion: The 5th New Lentor Condo in 2 Years Still Worth Your Attention?
TLDR for "Exciting Updates from Lentor Mansion" Lentor Mansion, a new project in the vibrant Lentor region, is set to...
Read More
What Factors Contribute To Singapore’s Real Estate Market Exhibiting Less Volatility Than Other Major Cities?
TLDR
The Singaporean real estate market has remained stable due to government cooling measures. These include Additional Buyer’s Stamp Duty (ABSD) and Seller’s Stamp Duty (SSD) to regulate demand and curb speculation. Measures like Total Debt Servicing Ratio (TDSR) and Loan-to-Value (LTV) ratios protect buyers from overstretching financially. Public housing through HDB and CPF schemes ensures high home ownership rates and steady prices. These steps maintain market stability, safeguard the economy, and offer opportunities for strategic property investments tailored to individual needs.
Singapore’s real estate market is known for its consistent stability and comparatively lower fluctuations compared to other major cities like Hong Kong, New York, Sydney, and London.
Cooling measures have been instrumental in Singapore’s efforts to prevent volatile boom and bust cycles in its property market. These measures have also been observed in other markets.
The implementation of cooling measures has had a major influence on stabilizing Singapore’s property market. It all began in 2009, when the first cooling measure was implemented, laying the groundwork for further measures and policies that would be adopted in the decade ahead. Examining the pre and post-cooling measure fluctuations of the Singaporean property market, it is clear the measures had an immense effect. For example, the highest price point reached in 2013 was a whopping 71.6% greater than the 2008 bottom of $750 per square foot – that’s a larger gap than the 14.7% between the 2014 and 2019 highs.
The history of cooling measures in Singapore
BSD and ABSD moderates price growth
Singapore’s residential property market has been subject to government measures meant to cool the market, including raising the ABSD rate for foreign buyers to a remarkable 60%. Singaporeans and Permanent Residents (PRs) buying their first home are exempt from paying the ABSD, however, Singaporeans and PRs buying their second or subsequent properties are required to pay a 5% ABSD. This tax, along with the BSD, serves to add to the total cost of purchasing a residential property and help to regulate demand.
The advent of SSDs has put the brakes on speculation.
In 2010, the Seller’s Stamp Duty (SSD) was introduced to curb rampant speculation-driven buying and selling of condos. In 2007, the sub-sale volume reached an all-time peak of 4,854 units; however, it dropped to 3,317 units by 2010 and has consistently remained below 3,000 units ever since. In 2022, only 695 condo units were sold through sub-sales. Evidently, the government is taking firm action against speculation as these transactions tend to cause artificial price hikes which can lead to unsustainable price bubbles.
The TDSR and LTV ratio promote smart financial management
The government has implemented a range of measures, such as adjusting TDSR and LTV, in order to protect homebuyers from taking on too much debt. The latest move came in September 2022 when the medium-term interest rate used to calculate TDSR for loan eligibility from financial institutions was raised from 3.5% to 4%. Prior to this, in December 2021, TDSR was reduced from 60% to 55%, both measures providing a ceiling on housing budgets and helping to prevent buyers from becoming overstretched.
“HDB and CPF: Bringing Home Ownership Within Reach for Singaporeans”
Singapore’s home ownership rate of 89.3% is one of the highest in the world, largely due to the success of our public housing program. Thanks to the Central Provident Fund (CPF) being utilised for down payments and mortgage payments, home ownership in Singapore is much more affordable than in cities like Sydney and Hong Kong (62.1% and 51.2% respectively). HDB and the use of CPF have helped to cushion the volatility in the private property market, as 74% of Singaporeans now live in and own their own HDB flat. HDB also maintains control over the supply of new flats and prices of BTO flats, while the government has implemented various cooling measures and regulations related to HDB eligibility.
The cost of HDB flats remains consistent over time
The implementation of cooling measures and HDB’s tight control over the availability and prices of BTO flats have resulted in steady resale prices of HDB flats over the past two decades. After peaking at $469 psf in 2013, the resale prices declined to $441 psf in 2014 and stayed steady until 2021 when there was a 13.2% year-on-year increase in the average price, reaching the milestone of $500 psf and now standing at $557 psf – all due to delayed construction and scarce supply of new flats.
How can less volatility be beneficial?
The housing sector in Singapore is undeniably important to the country’s economy, as evidenced by the high home ownership rate. With housing often serving as a store of wealth for individuals, extreme fluctuations in prices can have catastrophic effects – the 2007 US subprime financial crisis being a prime example. This is why Singapore takes extra care to ensure a balanced housing market, thus protecting the economy from any further potential harm and contributing to sustained growth. It is evident that Singapore values the housing sector and all of its related industries, and takes the necessary steps to ensure a stable and secure economy.
Should You Buy, Sell or Wait?
If you’re reading this, you must be trying to figure out the best course of action right now: is it the right time to buy or sell?
It’s difficult to give an exact answer since everyone’s situation is unique and what works for one person may not necessarily work for you.
I can bring you a wealth of on-the-ground experience and a data-driven approach to provide clarity and direction. From beginners to experienced investors, our top-down, objective approach will help you on your real estate journey.
I can help you by:
- Offering Strategic Real Estate Advice – I can help create a comprehensive plan to guide you through your property journey.
- Connecting Your Home with the Perfect Buyers – Through stunning visuals, an effective communication strategy, and an in-depth knowledge of the market, we’ll ensure your home is presented in the best possible way to fulfill your goals.
You May Also Like …
Reduced Lease Durations for HDB Flats: What Potential Savings Could Your Property Offer?
TLDR Shorter lease HDB flats are typically about 22–25% cheaper than their 99-year counterparts, based on both resale and BTO...
Read More
6 Possible Risks of Purchasing a One-Bedroom Apartment in Singapore: Key Considerations to Be Aware Of
TLDR One-bedroom condos in Singapore are attractive for their lower entry price and rental potential, but buyers should be aware...
Read More
Top 5 : Advantages of Owning a Luxury Condominium in Singapore for Long-Term Investment
Singapore, a thriving global city-state, has become an attractive destination for real estate investors. Among the various property types available,...
Read More
When a Property Seller Pulls Out of the Deal : What Now?
TLDR When a property deal is not yet formalized, sellers can withdraw without consequences. However, once an Option to Purchase...
Read More
Top 5 Overlooked Features that Buyers are Looking for in Singapore Property
The top 5 overlooked features that buyers are looking for in the Singapore real estate market. These are the overlooked...
Read More
5 Exciting Trends Shaping Singapore’s Property Market for Future Buyers After 2024
TLDR When it comes to the evolving landscape of property development in Singapore, developers are facing new challenges and opportunities....
Read More
Are Early Bird Discounts At New Launches Genuine Or A Marketing Gimmick?
TLDR When considering investing in new property projects, understanding developers' pricing strategies is crucial. Early bird discounts are not just...
Read More
Singapore’s Property Market: Will the Newly Proposed 2023 Cooling Measures, Including a 60% Foreigner ABSD, Make Waves or Mere Ripples?
TLDR The recent surge in Additional Buyer's Stamp Duty (ABSD) rates in Singapore targets mainly foreigners and entities, with rates...
Read More
Should I Buy In A Newly MOP HDB Or An Older Resale HDB?
TLDR When deciding between a recently MOP-ed HDB property and an older resale HDB property in Singapore, various factors come...
Read More
Are You Ready to Take on the Singapore Property Market in 2023? 12 Reasons to Be Hopeful (Or Wary)!
2022 sure was a rollercoaster ride for the property market, and the world! From war in Europe to skyrocketing interest...
Read More
5 Tips : How To Invest In Singapore Property Without Losing Sleep Over It
Investing in Singapore's property market can be a lucrative venture, but it's important to approach it with caution and a...
Read More
How to Maximise Your Home Value Before Selling : 6 Simple Steps
TLDR When looking to sell your home, consider simple ways to boost its value without costly renovations. Organize living spaces,...
Read More
Top 5 Seafood Restaurants in Singapore
Singapore, a melting pot of cultures and culinary delights, is well-known for its diverse food scene. With its strategic location...
Read More
Exploring the Allure of Freehold Titles Among Singaporeans
TLDR Freehold properties remain highly attractive in Singapore due to their scarcity, lasting value, and legacy potential. Buyers are drawn...
Read More
Unpacking Property Ownership: Joint Tenancy vs. Tenancy-in-Common
TLDR When a property has multiple owners, the choice of ownership type is crucial to determine how shares are distributed...
Read More
Timing the Market: Lessons from Singapore’s Property Price Fluctuations
TLDR Singapore’s property market has seen price declines during major crises such as the 1985-1989 pre-recession, 1996-1998 Asian Financial Crisis,...
Read More
Top 5 Rooftop Pools in Singapore for a Swim
Singapore, a bustling city-state known for its iconic skyline and innovative architecture, is home to some of the most stunning...
Read More
Does Sell 1 Buy 2 Strategy Still Works Today in 2024?
TLDR When considering the "Sell One By Two" property investment strategy, keep in mind that it involves selling your previous...
Read More
Top 5 Reasons : Why Investing in Singapore’s Property Market Is a Smart Move for Millennials – Expert Analysis!
In recent years, Singapore has emerged as a global financial hub and a prime destination for property investments. The city-state's...
Read More
