ASIATODAY.ID, JAKARTA – The Singapore government announced new regulations on home ownership in the city state. This policy is expected to control price increases that have occurred over the last few years.
Singapore Prime Minister Lawrence Wong is said to be trying to maintain the stability of the housing market ahead of the upcoming general election.
In a joint statement released by the Ministry of National Development and the Housing and Development Board (HDB), these restrictions aim to create a stable and sustainable housing market. One of the key steps that will be implemented is reducing the loan-to-value ratio limit for HDB financing to 75% from the previous 80%.
With this rule, a larger down payment will be required to get a house managed by HDB. However, the loan limit from commercial banks will remain at 75%.
This new regulation will come into effect on 20 August 2024 and will apply to transactions in the secondary market as well as Build-To-Order (BTO) units that will be offered starting in October.
“With demand continuing to be strong and widespread for HDB flats, these measures are expected to cool the market and encourage more prudent lending,” said the statement, quoted Tuesday, August 20 2024.
Apart from that, the government will also increase subsidies for purchasing a first home. Lion citizens can receive subsidies of up to S$40,000 to help first-time home buyers, especially those with low to middle incomes.
Bloomberg views this populist step as preparation for Wong to win the elections with the People’s Action Party (PAP) in the general election taking place no later than November 2025, but it could be done sooner. This election will be the first test for Wong since his party experienced a decline in popularity in the 2020 election, although it still won 89% of seats in parliament.
The issue of housing affordability was one of the factors influencing the results, alongside economic concerns and a more open view of the younger group towards the role of the opposition.
The Singapore government has previously taken steps to curb the surge in property prices, especially in the private home segment.
In April 2023, the government doubled the stamp duty for foreign buyers to 60% and raised the levy for second home buyers. This effort shows the government’s seriousness in maintaining the affordability and stability of housing prices in the country. (ATN)
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