New Singapore Property Rules

The Singapore Government have announced new anti-speculation market measures over fears that double-digit property price increases are unsustainable in the long-term. The government are hoping that the new measures will create a more stable and sustainable property market.

Singapore properties are amongst the most expensive in Asia with prices rising 5.3% quarter on quarter in the second three months of the year and 5.6% in the first three. Even during the global financial troubles, the Singapore property market continued to grow, bucking the trend of many other nations.

The new measures mean that owners who sell properties less than three years after buying them will be subject to a duty of 3% of the resale value – this measure only previously applied if the property was sold within a year of purchase. For Singapore property buyers with at least one outstanding loan, the minimum cash down payment has been increased from 5% to 10% of valuation, with the maximum amount a bank can lend capped at 70%, down from 80%. All these measures have been announced with immediate effect.

It is hoped that the new measures will discourage property ‘flipping’ where a property investor will buy one or more properties with a low cash downpayment and a high loan percentage and then sell the property on quickly for a fast profit.

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