IS428 2016-17 Term1 Assign1 Tee Yu Xuan

Abstract

This project aims at identifying the trends of private residential properties (including Executive Condominiums) in Singapore for the Year of 2015. The price index and share of property distribution will be taken into consideration to evaluate if the previous private property policies implemented by the government has made any significant changes.

The findings of this project will provide 3 recommended policies to further improve the private property markets in Singapore.

Problem and Motivation

Since residential prices surged in 2009 by 15.75% after the recovery of the slump in the economy during 2008. The surge in property demands renewed fears of a property bubble and the Singapore government has warned against the speculation and implemented a series of cooling measures along the years. Additional taxes such as stamp duty on additional private property purchases and harder requirements for taking up loans were introduced to make property purchases a much heavier decision to make than before.

Some important cooling measures introduced were:

• Stamp duties on private property purchases (up to 3% depending on property price)
• Additional stamp duties on purchasers who are looking to by their 2nd, 3rd or nth private property (7% for 2nd, 10% for 3rd etc.)
• Additional stamp duties on PR or foreign purchasers (up to 15% of property price)
• Bank Loan restrictions, banks are allowed to give loans up to 80% of total property price
• Stricter income requirements to qualify to different amount of loans, to prevent likelihood of defaulting on mortgage payments

After six years of cooling measures, many developers, property agents and industry associates have been calling for the measures to be lifted or amended.

But has Singapore's private property market really recovered and escaped the risk of a property bubble? Or are these industry related agencies looking to increase their profits by calling for amendments?

Changes in Property Price Index in Singapore History. The cooling measures can be seen finally taking effect in 2013 as price starts to fall.

References

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