- IRS official refuses to answer questions at scandal hearing |
- Global stocks, oil fall after Bernanke; dollar gains |
- Oklahoma tornado victims astounded at how they survived |
- CORRECTED-White House threatens veto of bill to bypass Obama on Keystone
- FBI says man shot dead while being questioned about Boston bombings
UPDATE 2-Singapore acts to cool property mkt, following HK
* Buyers of 2nd homes can borrow up to 70 pct, from 80 pct
* Stamp duty on sellers who buy and sell within 3 years
* Aimed at speculators, won't hurt home buyers - analysts
* Singapore property stocks fall on new measures
* Singapore moves follow similar steps by HK, China (Adds analyst comments, background; changes byline and dateline)
By Kevin Lim and Lee Chyen Yee
SINGAPORE/HONG KONG, Aug 30 (Reuters) - Singapore announced on Monday restrictions on people buying second homes as part of new measures to cool its red-hot residential market, joining Hong Kong and China in taking steps to keep a lid on housing prices.
Home prices in Asia have soared in recent months, fuelled by the region's rapid economic recovery and ultra-low interest rates. The gains have been highest in Singapore, where prices rose 34 percent in the 12 months to June, followed by Hong Kong which increased 21 percent, according to Global Property Guide.
Part of the demand has come from wealthy Chinese individuals looking to diversify geographically by putting money into the two ethnically Chinese cities, which impose few restrictions on property investments by overseas investors.
"This latest move is not to discourage home-buying on the whole. It is aimed at property investment, especially short-term ones," said Nicholas Mak, former head of research at Knight Frank in Singapore and now a lecturer at Ngee Ann Polytechnic.
Hong Kong tightened mortgage lending this month for bigger apartments as prices headed for historic highs, while China is clamping down on bank lending to the property sector as well as making sure developers do not hoard land meant for housing development. [ID:nTOE67C067] [ID:nTOE67I087]
However, South Korea is taking a different path, announcing on Sunday it would ease some mortgage borrowing restrictions for low income earners buying homes for their own use. [ID:nTOE67S007]
In Singapore, the new measures included decreasing the amount those with existing mortgages can borrow to buy second properties to 70 percent from 80 percent, and extending a stamp duty to sellers who buy and sell within three years.
The stamp duty was previously imposed on speculators who disposed of their homes within one year. For a FACTBOX on recent property measures in key Asian markets [ID:nTOE67T05Y]
Singapore property stocks fell after the government's announcement, with shares of Southeast Asia's second-largest developer City Developments (CTDM.SI) falling as much as 4.3 percent and Wing Tai (WTHS.SI) dropping as much as 4.6 percent.
CapitaLand (CATL.SI), Southeast Asia's largest developer, declined as much as 2 percent.
The worst-hit counters were those with large exposure to Singapore residential property, said DMG & Partners analyst Brandon Lee.
Analysts said Singapore appeared more concerned about ensuring home prices remained affordable for the majority of citizens rather than asset inflation, noting the new measures did not attempt to stem inflows from overseas.
The measures, they added, come on the back of an announcement by Singapore Prime Minister Lee Hsien Loong on Sunday that the government will build 22,000 new public homes next year, up from 16,000 this year, in a bid to ensure housing remains affordable.
"We've acted twice to cool the market -- once last year and once in February this year -- but prices are still rising," Lee said. "We need to do more."
Chua Yang Liang, head of Southeast Asia research at Jones Lang LaSalle, noted that while the pace of price increase in private residential property has moderated, resale prices of government-built HDB apartments continued to rise strongly.
"The latest introduction of measures are motivated largely by the unabated rise in public housing prices," he said, noting the 4.1 percent increase in HDB resale prices in the second quarter exceeded the average of about 3.0 percent in preceding periods.
Chua predicted Singapore home prices will continue to rise but at a slower pace, with private home prices moderating to 2-3 percent growth per quarter and HDB prices rising 1-2 percent.
Singapore said on Monday it introduced the new measures "to ensure a stable and sustainable property market where prices move in line with economic fundamentals".
Singapore interest rates are near record lows despite economic growth that will likely hit 12-15 percent this year, due to an increase in inflows from overseas.
Malayan Banking (MBBM.KL), for instance, earlier this month launched home loan packages in Singapore with first-year rates of as low as 0.88 percent per annum.
"The current low global interest rate environment will not continue indefinitely, and higher interest rates could have severe implications for buyers who have overextended themselves," the Ministry of Finance, Ministry of National Development and Monetary Authority of Singapore said in a joint statement. (With additional reporting by Harry Suhartono and Lavrina Lee in Singapore; Editing by Muralikumar Anantharaman)
- Tweet this
- Share this
- Digg this