Will There Be Add-On Looming Property Cooling Measures?

In an article written by Ansuya Harjani | CNBC , “Threat of Curbs Looms for Singapore Home Market
….”The recent [price] increase is fairly tame compared to [2009-2011], but robust when seen against the setting of what the government has done to cool the market and the poor economic environment of the local and global economy,” Yang Liang Chua, Head of Research at Jones Lang LaSalle wrote in a note on Wednesday
Policymakers in the city state have since kept a close watch on the market. In October last year, the government moved to cap the amount of time granted to homebuyers to repay loans on new residential property at 35 years.

Min Chow Sai, a property analyst at Nomura agrees there is “no doubt” the latest increase in house prices has increased the possibility of further government intervention. He added that the anticipation of further policy changes may have a positive impact on home sales in the near term as buyers look to make their purchases before any new measures come in.

“The key question now facing the government is whether it makes sense to continue introducing measures that lack teeth and put its credibility further at risk, or is it time to make a thorough review of the existing policies and make bold changes accordingly?,” Min said

“We expect heightened policy measures with the government responding comprehensively to suppress any price increases that rise beyond a level of about 2-4 percent per annum,” he added….

So will Singapore’s Property Prices Fall??

Read what Credit Suisse analyst has to say If This Happens, Singapore Home Prices Will Fall

And Read Why a Slump in Deals Won’t Hurt Singapore Home Prices

… ”Cooling measures will effect volumes; we won’t see the 22,000 units repeated next year. But, that’s not going to impact prices – developers have made a cash buffer in the last 24 months, so they don’t feel the need to reduce prices,” Donald Han, senior advisor at HSR Property Consultants, told CNBC.

With land prices rising, translating into higher input costs for developers, Alan Cheong, head of research, Singapore, at real estate services firm Savills, sees prices moving much higher next year, up to 10 percent in the “mass market.” The mass market is categorized by private apartments priced in the S$850 ($690) to 1,200 per square foot range”…..

However,,…Experts said there are only two scenarios that will cause the steady rise in real estate prices to reverse its trend: a “huge” correction in the stock market, or higher interest rates.

Interest rates in Singapore, known as the Singapore Inter-bank Offered Rate (SIBOR), tend to track the United States Federal Reserve’s funds rate, which is expected to remain near zero until 2015.

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