Are new cooling measures going to be implemented in 2021?

Rumours or speculations? Will there be new cooling measures implemented in 2021? Are cooling measures here to curb HDB, Private Properties— or both?

While it remains to be seen whether further cooling measures will actually be implemented this year, the government has commented that they are closely monitoring the property market.

Property prices and transactions have been surging since last year, against the continued economic downturn. If left unchecked, this scenario can potentially lead to a bubble burst in Singapore’s property market, which would cause properties to greatly depreciate in value. Therefore, cooling measures can be vital for ensuring the stability of the real estate market.

If you’re planning on buying properties, you’d probably be wondering how potential cooling measures could affect you. Here are some of the possible cooling measures which could kick in.

Potential tightening of the Loan-to-Value (LTV) limit

One possible cooling measure which may be put in place, is the tightening of the Loan-to-Value (LTV) limit. The potential tightening of the LTV limit would translate to a further cap on the sum which property buyers could borrow, for their property purchase. This would prevent the issue of overborrowing, which may otherwise happen, considering the low interest rates at the moment.

Potential extension of the minimum occupation period (MOP)

Another likely cooling measure is an extension of the minimum occupation period (MOP). HDB upgraders have greatly boosted the property market, as they capitalised on the low interest rates to buy private properties. A potential extension of the MOP would curb a further surge in resale prices, as newer HDB flats with a longer lease balance, will not drive higher resale prices when they are sold upon the completion of the MOP. This would ensure that property remains affordable for homebuyers.

Potential increase in the additional buyer’s stamp duty (ABSD)

A possible increase in the additional buyer’s stamp duty (ABSD) would deter home investors from speculating in property, which would lead to a further rise in property prices. This would, in turn, prevent a possible bubble burst, and ensure that the property market remains stable for homeowners.

While purchasing properties may appear to be more difficult with the possible implementation of cooling measures, these cooling measures ensure that the property market would be viable for homebuyers— and even home investors— in the long run. Without measures to regulate the property fever, the property market may run itself into a bubble, which would invariably cause the value of properties to greatly depreciate.

Looking to purchase a property but worried about potential cooling measures that could set in?

At Wonder Homes, we have helped many homebuyers and investors to navigate the various cooling measures in the property market, and we can also help you with your property purchase, should additional cooling measures kick in! Head over to our website at www.wonderhomesg.com, and drop us a call today!

Pamela Tan: 9457 6525

Shirley Wang: 9436 1909