Property Mortgage 101: Looking at HDB Loans and Flats

The Singaporean government has established the Housing and Development Board or HDB as an answer to the increasing problems on housing shortages. Housing opportunities are provided by HDB to help those who do not have much choice on properties. Singaporean citizens or those who have been granted permanent residency can avail of HDB loans. This Singaporean property loan can be used to get a flat for the borrower and his or her family. With an interest rate of 2.6%, HDB loans are viable options for those who want to get their own places. The 99-year lease hold also makes HDB flats one of the most permanent residential units that anybody can have.

HDB loans were originally based on the land value and construction cost of the unit. The small interest rate represents the profit that the government will make. Because of this, many think that they can make money off the flats by taking out HDB loans and leasing the unit to somebody else for a profit. Some buy flats then resell it at a higher cost. However, these are illegal acts according to strict HDB regulations. There exist rules on minimum years of residency in the unit before leasing or reselling the property. The flat may be confiscated by the government if they find out that you broke the agreement and guidelines of the loan.

The strict regulations on HDB loans have sparked debates on the issue of having flats as assets. There were issues before that the government wilfully constructed a small number of flats to increase the demand for these units, increasing the selling price of each flat. Most modern units have added features like extra small rooms or frills that do not necessarily add value to the flat but increased the construction price. This means that borrowers have to take out bigger HDB loans in order to get their hands on these flats. Without an increase in income, paying the loan has become difficult to some owners. Because of this inability to pay the home loan, forfeitures of units have begun to take place.

In order to make sure that HDB loans work for us, ensure also your capability to pay the loan. HDB flats can be difficult to maintain financially, making them more of liabilities than assets in the long run. Remember that the government controls the demand and supply of HDB flats. The regulations and costing can also change from time to time without necessarily informing the buyer and borrower. Because of this, you may end up paying more than what you have prepared for. A financial adviser will be able to help you get the education and protection you need so that you can make wise investments in the future. Your financial stability is still the most important aspect in making these decisions. While HDB loans are there as an option for us as potential home owners, make sure that you study each regulation and factor carefully before getting into an agreement with the lending institution.

Find out more at Singapore Home Loan website.

Or contact the loan experts at: -

+65-9782-8606 (SMS)

loans@propertybuyer.com.sg

Safe way to invest in Singapore properties

There are many ways to buy a property in Singapore. There are many ways to prevent being cheated or having your money or safety compromised. Read more to understand how to make sure you do all the proper property buyer research and checks.

Safe property buying process

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Home loans for Indonesians up to 75% without proof of income in Singapore

Who should read about asset based lending?

For Indian citizens earning above 8k a month in SGD equivalent in their home country buying a property in Singapore or refinancing a property for Maximum Singapore dollar CASH, so that you can invest in better yield.

It is also extremely powerful for: -

Singaporeans earning a joint income above 8k a month and buying a second property, but who already has several financial commitment, this scheme is able to gracefully over-look the other commitments.

For Singaporeans buying their 1st property, and able to put down a 25% downpayment. The loan quantum available to them can be substantial, allowing them to leverage highly.

Singapore Banks Asset Based Lending Criteria

What about the criteria for Asset Based Lending Mortgage?

Most banks in Singapore lend based on criteria such as debt to servicing ratio. The usual debt servicing ratio is capped at 50% to 60%.

This 50% to 60% debt servicing ratio is what the bank would lend at the maximum, not a financial planning guideline.

Only some banks in Singapore will do asset based lending for your property with minimum income.

Asset based lending is rare. Banks see it as risky. Most often, banks need you to put assets under management (AUM) of $250,000 or 24 months of repayment amount (whichever is higher), plus income level.

Typical Singapore Asset Based Lending

Someone with a fully paid up property valued at $3.2m. He goes to the bank to borrow 50% of $3.2m. He gets $1.6m in cash for an equity term loan (Cash out). The bank will usually want to see proof of liquid assets of 24 months of the installment amount.

illustration of a scenario: -

Age of owner = 50 years old

Property valuation = $3,200,000

Loan to value = 50%

Loan tenor = 20 years

Interest rate = 1.5%

Loan amount = $1,600,000

Monthly Installment = $7,720

In this scenario, the owner would most likely be asked to show proof of 24 months of monthly repayment in liquid assets of $185,280.

A Better asset based lending loan structure in Singapore

This type of Asset Based Lending goes up to 70% or 75% of the loan-to-valuation.

This type of asset based lending with high Loan quantum is good for Singaporeans buying 2^nd or 3^rd properties. This structure is also good for Foreigners refinancing their paid up property for CASH OUT.

Scenario: Indonesian, 50 years old, paid up property, earns $25,000 SGD worth of income, but in his own country.

Property Valued at = $6,000,000

Status = Fully Paid up

Loan-to-value of = Can to up to 70% (up to 75% subject to approval)

Loan tenor = up to 25 years

Loan amount = $4,200,000

He will be eligible to borrow up to $4,216,000 based on his asset and some proof of income instead of $2,529,000.

Most rich people have a lot of money, but they like to borrow money, because using other people’s money is a way to grow rich. His borrowing quantum goes from $2.529m to $4.216m. Cash is freed up at cheap cost (housing loan borrowings are the cheapest form of borrowing) to invest in higher yielding assets.

Here are the facts of this loan

Age = up to 75 years old

Tenor = up to 40 years

Min Income of $8,000 joint income

Documents required for Asset based lending

NRIC = front and back copy. (For foreigners who are NON-PR, copy of passport)

Income = Proof of income via Company letter only (or alternative proof)

As long as income certified by Financial officer or Human Resource, it is recognized

OR

3 Months salary slip

OR

2 years of Notice of Assessment (NOA) – from IRAS.

Existing home loan balance (if any)

= 6 months to 12 months bank statement showing outstanding loan amount. (if fully paid, copy of title deed)

Option to purchase = Required for a New purchase of a completed property. (Not needed if

refinancing)

Contact : loans@propertybuyer.com.sg

Mobile (sms) : +65 9782 8606

Get Asset Based Lending home loan

Get Asset Based Lending Refinance Home Loan

If you are a Singapore Mortgage Broker, do contact us, we will avail this to you and your clients. (Only for Mortgage Broker and Consultants)

Master Lynn Yap's Prediction for Dragon year 2012

Master Lynn Yap's Prediction for Dragon Year 2012

How did you fare last year? Did you follow what Master Lynn taught? What are the things to look out for in the year of the dragon 2012?

Master lynn yap prediction for 2012

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WILL MONEY VELOCITY FURTHER SLOW DOWN DUE TO PROPERTY REGULATION IN SINGAPORE

WILL MONEY VELOCITY FURTHER SLOW DOWN DUE TO PROPERTY REGULATION IN SINGAPORE

Let’s just say the risk is not about whether it will Cool inflation, but rather whether it will totally put out the fire and Freeze the property market in Singapore.

Inflation is influenced by the following equation.
{MV = PQ} = (by Irving Fisher, 1911)

Where

• M is the total dollars in a Nation’s money supply (generally the M3 or M2)
• V is the number of times per year each dollar is spent (Velocity of money)
• P is the avg. price of all the goods and services sold during the year.
• Q is the quantity of Assets, goods and services sold during the year.

When M2 or M3 increase, where V and Quantity stays the same, then P increase. The rate of P’s increase is inflation.

Right now, we are seeing M2 or M3 increasing faster than GDP in many nations, while prices are fairly stable at ~5.4% (in 2011) in Singapore and production (Quantity) is rather stable, this means that V, the velocity of money has yet to pick up. In other words, people are not yet spending.

Once Velocity of money V picks up, in order to control price rise, Quantity will have to pick up dramatically as well. Not all quantity can be ramped up quickly enough.

[M2 or M3 increase] x [V] = [P] x [Q]

So by taking out Foreign M2, M3 as well as M2 in Singapore attributed to foreign ownership by imposing a 10% Additional buyer stamp duty, Singapore has effectively reduced the M2, M3 money supply from the property market.

In short, this policy may somewhat reduce inflation attributed from Housing. However it may not stop these money from being channeled to other parts of the economy, especially commercial properties.

USA M2 Money Supply


(Source: Wikipedia)


European M2 Money Supply



Australian M2 Money Supply



Singapore’s M2 Money Supply

S$ MILLION
END OF PERIOD M2
2010
Nov 401,429.3
Dec 403,078.2
2011
Jan 406,246.8
Feb 406,280.0
Mar 413,255.5
Apr 422,475.6
May 422,716.1
Jun 423,516.7
Jul 431,311.5
Aug 431,253.4
Sep 434,818.4
Oct 439,817.4
Nov P 442,144.4

AS you can see, M2 from Dec 2010 up till Nov 2011, has grown by 10%, this exceeds the GPD growth figures.

As there are ample funds in Singapore, interest rates can stay low, due to low velocity of money, once there is signs of up-trend, then we expect markets to rally very quickly and these money will be drawn down. And cost of funds will consequently go up.

Call Property Buyer Mortgage Consultants at 9782-8606 or email
loans@propertybuyer.com.sg to assess your Home Loan Financing Needs.

Property investors hit by Singapore's Additional Buyer Stamp Duty

Effective 8th Dec 2011 – Singapore’s URA imposes additional buyer stamp duty

If you are buying a property in Singapore and you are a foreigner, you will now be faced with an additional buyer stamp duty on top of the existing stamp duty imposed on property transactions.


Currently the stamp duty for purchasing a residential property is: -



• 1% of the selling price for the first $180,000

• 2% of the selling price for the next $180,000

• 3% of the selling price for the from $360,000 onwards.



Will Luxury Condominiums targeted at foreigners to be hit by new regulation?



Additional stamp duty is being imposed to cool the RESIDENTIAL property market.



The Additional Property Buyer stamp duty (ABSD) from 08 Dec 2011 is:



Foreigners and Corporate entities buying Residential private property have to pay an additional buyer stamp duty of

10 percent

Permanent residents (PR) owning one and buying the second and subsequent residential property will be liable to an Additional buyer stamp duty

• 3 percent




Singapore citizens owning 2 and buying the third and subsequent residential property will pay an additional buyer stamp duty

• 3 percent




Permanent Residents owning 1 and buying the 2nd and subsequent residential property will pay an additional buyer stamp duty

• 3 percent




Singapore Citizens (Singaporeans) owning two2 and buying the third and subsequent residential property will pay an ABSD of

• 3 percent




Foreign purchases account for 19% of all private residential property purchases in 2H 2011, up from 7% in 1H 2009. (URA)




In the case of a joint purchase, as long as any party is a PR or Foreigner, the higher additional property buyer stamp duty will apply.

HDB Property Buyers not affected URA clarified that HDB property buyers are not affected

Buyers for HDB properties are not affected by Additional Buyer stamp duty. Only Singaporeans and PR are eligible to buy a HDB flat. Someone buying into HDB flat or a new unit under the DBSS or EC will not be subjected to Additional buyer stamp duty since they will have dispose of their current property as part of the conditions for the purchase of the HDB, DBSS or EC units.

Buying property in singapore is becoming a complicated affair.

Likely Effects of Singapore's Additional Buyer Stamp DutyWhat is the effect of the Additional Buyer Stamp Duty (ABSD)?

We praise the URA for making this additional cooling measure. This measure will further cool the market. This cooling measure is also timely as it prevents foreign owned corporate entities from cheaply buying up private properties. There is currently a lot of Money supply in the world as the M2 money growth has often outpaced the growth of the GDP, especially since 2009 when the US has printed more money via quantitative easing. This may be a preemptive move against possible asset inflation. (Appendix 1: US M2 Money Supply and European M2 Money Supply).



What this means is, if these money is to be put to use to buy up assets, 10% of additional buyer stamp duty won’t entirely stop them from buying into Singapore properties, but only slow them down.



Inflation reduction?



What affects inflation?

MV = PQ = (by Irving Fisher, 1911)




Where




• M is the total dollars in a Nation’s money supply (generally the M3 or M2)

• V is the number of times per year each dollar is spent (Velocity of money)

• P is the avg. price of all the goods and services sold during the year.

• Q is the quantity of Assets, goods and services sold during the year.




When M2 or M3 increase, where V and Quantity stays the same, then P increase. The rate of P’s increase is inflation.




In recent years, money supply has grown largely faster than GDP growth. What this tells you is, the money velocity is slow. People are not spending. Even in Singapore, although inflation is 5.4% in 2011, it is still fairly stable and controllable in view of looming recession in Europe.



However there is risk as money supply is ample. Once there is light at the end of the tunnel, confidence returns, velocity of money will pick up. And at that time, the Quantity (Supply) will have to pick quickly to control price rises. As far as property is concerned, the lead time to complete a unit is 2 to 4 years and this will lead to imbalance in prices.



M2 or M3 increase x V = P x Q



Imposing a stamp duty has the effect of reducing the foreign owned portion of M2 or M3 from the Singapore property market.

In short, this policy may somewhat reduce inflation attributed from Housing. However it may not stop these money from being channeled to other parts of the economy, especially commercial properties.

Singapore Recession worries

Now, with the European debt crisis looming, we wonder whether this is the right time to impose such a regulatory measure. After all the property market has already cooled dramatically. Moreover, this policy hurts the mid tier private property markets and entry level luxury more.

Should the policy target run away prices in HDB instead?

In view of the massive under-supply of HDB’s physical stock given the massive mass increase in population, it will still take several years to balance the supply and demand. Currently demand far outstrip supply.




HDB pricing index will likely continue to rise into 2012 and 2013 as imbalance is gradually more balanced.




While DBSS is being added to the supply, these Design, Build and sell housing by private developers of HDB houses lead to a even more severe rise in HDB housing prices.

DBSS developers buy expensive land from the Singapore government, add on their profit and then pass on these costs to helpless Singaporeans and Permanent citizens.

Singapore government is the ultimate winner in terms of the good price for the land.




Spill over may soon be seen in Executive Condominium (EC) with some ECs approaching prices of Mass Market condominium prices. This supports the prices of mass market condominium to be launched in large volumes.




Unfortunately this additional buyer stamp duty (ABSD) does not apply to HDB, Design, Build and Sell (DBSS) and Executive Condominium (EC). This ABSD affects Private property while what it should have done is to manage HDB price rises, especially the Run-away prices of DBSS flats. It’s unfortunately for Singaporeans.

Severe Demographic effects – Singapore’s Resident Population to dramatically increase?

Could more PR become Singaporeans so as to buy more private property (a third or more)?.




More foreigners holding employment pass will apply to become Permanent residents to qualify for buying HDB flats, leading to more housing demand pressures.




Expatriates faced with additional Buyer stamp duty on buying private residential property and is not well off enough to buy a private property will likely want to become Permanent resident (PR) so as to buy a HDB. This scenario is quite unfavourable for Singapore as we may be attracting the lower level and lower skilled expatriates competing with native Singaporeans.

Our Proposal for the regulatory changes: -

If we cannot keep regulations simple, then perhaps this regulations could be considered.



To impose the following regulations on: - Proposal to Impose regulations on: -



Housing Development Board Flats

• HDB flat owners who own a private property must stay in their HDB regardless of whether they meet the minimum occupation period (MOP), within 2 years of this announcement. Else these HDB home owners must sell their HDBs in the resale market.

o This stops existing HDB home owner from owning a HDB and staying elsewhere and making money by renting out their HDB flats.



o No force to be applied to them to sell their HDB flats, but they cannot make money via renting out their HDB flats while owning other Private residential properties and staying in private residential properties.

• To prevent new Permanent Residents from competing in the HDB market, all Permanent Residents (PR) must wait 5 years upon attaining PR before qualifying to buy a HDB flat. (This is to prevent lower tier foreign talents from speculating in the public HDB Singapore property market).

o All PRs to pay additional buyer stamp duty of 10% on HDB resale flats.



Proposed regulation on Private Properties

• Corporate entities who buy residential properties will pay an additional buyer stamp duty of 10% (As URA proposed)

o This should be especially applied to landed properties where it is scarce.

• All New PRs must wait 5 years before being eligible to buy a landed property.

o PRs not meeting the 5 year waiting period shall be rejected by the Land Dealings Approval Unit (LDAU), else a 15% additional buyer’s stamp duty of 15% is applied.

For Foreigners or PR purchase of private property (non landed): -

o NO additional buyer stamp duty, but

o Loan to value from Singapore banks to be reduced to 50%.

Regulation for Commercial Properties

• Apply the additional property buyer stamp duty of 10% on Foreigners buying commercial properties.

Summary of additional buyer stamp duty

URA’s imposition of the additional buyer stamp duty is generally correct in pre-emptive prevention of inflation given the massive money supply, however the timing is questionable as European debt crisis is still unfolding and money velocity is still slow.



This policy seems like another political knee jerk reaction, while it hides dangerous and possible side effects of massively increasing the Singapore Citizen population and PR population through lower tier foreigners.



This additional buyer stamp duty should stop speculation in HDB instead and leave the private residential property market alone.

If the intended thinking behind this policy is to make HDBs more affordable, then our proposed policy changes will likely be more effective.

Queen Astrid Park houses

Queen Astrid Park is located at the District 10 of Holland, Bukit Timah, Singapore. It is a landed housing estate with close access to the Queen Astrid Park, Klongtan Ping Restaurant, NTUC Fairprice, and School of Chemical and Life Sciences. Transportation access is the Bus Stop located at the Tan Boon Chong. If you want to use the MRT Stations, you may use the Holland Village MRT Station, Buona Vista MRT Station, and the Farrer Road MRT Station. Queen Astrid Park is near to Tanjong Pagar United Fc, Balestier Khalsa Fc, and Gombak United Fc football stadiums. The place is also near to the Padang Cricket Ground and the Kallang Cricket Stadiums.

Part 4 WILL RAISING OF HDB INCOME CEILINGS TO AFFECT HOME PRICES?

WILL RAISING OF HDB INCOME CEILINGS TO AFFECT HOME PRICES?

Part four

WHAT IS THE IMPLICATION OF HDB CEILING INCREASE

By increasing the income ceiling from $8,000 monthly household income to $10,000, this will mean that more people will be competing to buy New HDB flats when the supply is still fairly constricted.

IMPORTANT NOTE:


At $8,000 income ceiling, the maximum loan quantum is estimated at $890,000. At $10,000 income ceiling, the maximum loan quantum that a Singapore bank will lend is estimated at $1,113,000. Home loan calculators can be found here.


This means that DBSS can price their flats $223,000 more potentially. ($1,113,000 - $890,000) = $223,000. Initially, those developers will make more money. And these developers would bid for land more aggressively, hence bidding up land prices. Expensive land prices end up as a form of “UPFRONT PERSONAL TAX” by the government on the new HDB property buyer.



The government’s stance has been that people are marrying later and hence will likely have more income when they get married. By consequence, increasing the income ceiling from $8000 to $10,000 will allow them to be eligible. This will cause them to compete with existing property buyers to add to the pool of new HDB flat buyers.


To revisit the Centrale 8 (in Tampines) furor, having more people eligible via higher income ceiling will allow DBSS developers to make more profit due to the higher number of demand that will find their pricing “Affordable”. Higher levels of income will allow the developer to price it based on home loan affordability and push it to the limit. (People will pay through their noses for their HDB flats and any changes in home loan interest rates will hurt them really hard)

When DBSS developers feel confident of making more money, then they will bid higher prices for the land, eventually it means that more money flows to either the HDB or through the statutory boards holding the land and eventually as revenues to the government.

NOTE: At the time of publishing, we still have not found out who are the agencies that are responsible for the land sale, is it Singapore land authority (SLA) or is it HDB.

When DBSS price rises, this will create headroom for BTO prices to rise. Eventually, this will mean more expensive HDB flats. This in turn means that there is a minimum price on the land, forming the base support level for all other types of housing further up on the food chain.

The root cause is, a mis-managed supply and demand situation by MND which we strongly belief the government of Singapore had all the data at hand to solve, but did not do a good job.

Eventual victims are: Singaporeans who are newly wedded or singles who just become eligible to buy HDBs.

Continue on Part 5 - Summary and Proposals for Singapore Government

Property Buyer is believed to be Singapore's ONLY mortgage consultant that does Property Research. We avail research to the every day men and women to help you de-myth the Singapore property market and make sense of it.

Continue on Part 5
http://propertybuyer.com.sg/articles/regulation/will-raising-of-hdb-income-ceilings-to-affect-home-prices-part-5/

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WILL RAISING OF HDB INCOME CEILINGS AFFECT HOME PRICES? part 3

WILL RAISING OF HDB INCOME CEILINGS AFFECT HOME PRICES?

Part three - 3

HDB MEDIAN RESALE PRICES

HDB New flat prices are not lodged through Caveats. Data is too granular. And our enquiry with HDB ended with directing us to a HDB Annual report, which gives us some rather granular data. These data are too coarse to be used for any meaningful study or property research.

[caption id="attachment_320" align="alignnone" width="610" caption="Hdb flat supply statistics"][/caption]

(HDB Key statistics 2010)

And since we cannot get data on that, we can only infer.

“Before the change, a couple's combined income had to be below $8,000 a month for them to qualify to buy a BTO flat from the HDB, which is typically 20 to 30 per cent cheaper than a resale flat.”

(PMO,
http://www.pmo.gov.sg/content/pmosite/mediacentre/inthenews/primeminister/2011/August/HDB_raises_income_ceiling_to_10000.html
)

According to Prime Minister’s office, new HDB BTO flats are typically 20 to 30% cheaper than a resale flat.

And HDB median resale flat prices can be found here
(HDB, http://www.hdb.gov.sg/fi10/fi10321p.nsf/w/BuyResaleFlatMedianResalePrices?OpenDocument#Latest)

RESALE FLAT INCOME CEILING

There is no income ceiling for buying a resale flat

(http://www.hdb.gov.sg/fi10/fi10321p.nsf/w/BuyResaleFlatPublicScheme?OpenDocument) unless you are applying for a housing grant or a HDB loan.

Without an income ceiling in eligibility in buying Resale HDB, together with more demand from an increasing number of Permanent Residents (PR) each year, this causes the first time Singaporean buyers to be priced out of HDBs due to resale prices rise.

Population (Singstat) in '000s.

Year Total Population Singaporeans + PR
2004 ----------- 4,166.7 ----------- 3,413.3
2005 ----------- 4,265.8 ----------- 3,467.8
2006 ----------- 4,401.4 ----------- 3,525.9
2007 ----------- 4,588.6 ----------- 3,583.1
2008 ----------- 4,839.4 ----------- 3,642.7
2009 ----------- 4,987.6 ----------- 3,733.9
2010 ----------- 5,076.7 ----------- 3,771.7
(Census)

However this means that their only recourse is new HDB flats. But New HDB flats have been constricted in supply and HDB prices go crazy.

Singapore citizen grows (native) grow at a rate of 0.8 to 1% a year, excluding new citizens. It is obvious that by lumping Permanent Resident together with Citizen, the "Singapore residents" grows much faster.

Contact Property Buyer Mortgage Consultants for Customized Property Buying Research (fee based) or Contact us for mortgage advice (Free).

Continue on part 4.
http://propertybuyer.com.sg/articles/hdb-flats-and-loans/will-raising-of-hdb-income-ceilings-affect-home-prices-part-4/

WILL RAISING OF HDB INCOME CEILINGS TO AFFECT HOME PRICES?

WILL RAISING OF HDB INCOME CEILINGS TO AFFECT HOME PRICES?

Part 2
http://propertybuyer.com.sg/articles/singapore-property-investor-buyer/will-raising-of-hdb-income-ceilings-affect-home-prices/

Executive Condominium Supply launched and in the pipeline

Executive Condominium is a class of condominiums that are restricted by HDB’s rules on minimum occupation for 5 years and will only fully become a private estate after 10 years. These condominiums tend to be pricey on a relative scale compared to other condominiums which does not have any restrictions. Most newly wedded couples will most likely not be able to afford these type of housing looking at median incomes.

[caption id="attachment_373" align="alignnone" width="701" caption="HDB Executive Condominium launched - adding to supply"][/caption]






[caption id="attachment_375" align="alignnone" width="548" caption="Singapore HDB confirms sites for EC"][/caption]

http://www.hdb.gov.sg/fi10/fi10321p.nsf/w/BuyingNewFlatFlatsonOfferEC?




http://www.hdb.gov.sg/fi10/fi10321p.nsf/w/BuyingNewFlatFlatsonOfferEC?OpenDocument

http://www.facebook.com/pages/PropertyBuyercomsg/101354546624904

Continue to Part 3 - Raising of Income Ceiling to affect HDB home prices

WILL RAISING OF HDB INCOME CEILINGS AFFECT HOME PRICES?

WILL RAISING OF HDB INCOME CEILINGS AFFECT HOME PRICES?

Part 2
http://propertybuyer.com.sg/articles/singapore-property-investor-buyer/will-raising-of-hdb-income-ceilings-affect-home-prices/

Executive Condominium Supply launched and in the pipeline

Executive Condominium is a class of condominiums that are restricted by HDB’s rules on minimum occupation for 5 years and will only fully become a private estate after 10 years. These condominiums tend to be pricey on a relative scale compared to other condominiums which does not have any restrictions. Most newly wedded couples will most likely not be able to afford these type of housing looking at median incomes.


HDB Executive Condominium launched - adding to supply

Singapore HDB confirms sites for EC



http://propertybuyer.com.sg/articles/hdb-flats-and-loans/will-raising-of-hdb-income-ceilings-affect-home-prices-part-3/

Try out the carefully selected Home loan calculator

With HDB new raised income ceiling affect home prices?

With HDB new raised income ceiling affect home prices?
with permission from www.PropertyBuyer.com.sg

Part – One A

“The ceiling will go up from the current $8,000 to $10,000 for HDB’s build-to-order (BTO) flats, and from $10,000 to $12,000 for executive condominiums, Prime Minister Lee Hsien Loong announced in his National Day Rally speech last night.”

“Before the change, a couple’s combined income had to be below $8,000 a month for them to qualify to buy a BTO flat from the HDB, which is typically 20 to 30 per cent cheaper than a resale flat.” (PMO)

(PMO, pmo.gov.sg/content/pmosite/mediacentre/inthenews/primeminister/2011/August/HDB_raises_income_ceiling_to_10000.html)

The income ceiling for New HDB flats will be raised to: -
Income Ceiling Type of Flat

$10,000
Studio Apartment 3-room (mature towns/estates),
3-room (Premium) 4-room or 5-room flat
$5,000
3-room Standard (non-mature towns/estates)
$2,000
2-room
(HDB, http://services2.hdb.gov.sg/webapp/BP13EligCheck/BP13SHome?strSystem=CHECK)

HDB Property Supply In The PIPELINE

As we discussed in our last article, despite all the HDB launches in 2010 and the “NOISE”, if we look at the statistics these announced supply are hardly enough to meet even Singapore’s local domestic needs, not to mention providing for the massive influx of foreigners and new Permanent Residents (PR). Ministry of National development got their numbers quite wrong. In that, they have under-supplied HDB flats to the tune of even up to 100,000 units (based on our estimates)

The fact that there is not a long queue at BTO registration (As claimed by some minister as indication of people not needing a home) itself does not mean that there is no latent demand, from the between 22,000 to 25,000 marriages each year. (http://propertybuyer.com.sg/articles/singapore-property-investor-buyer/why-singapore-property-prices-go-crazy/) This probably reflects the various complicated paper work and bureaucratic costs imposed as well as the people not being able to afford the supply.

HDB Property Supply In The PIPELINE

As we discussed in our last article, despite all the HDB launches in 2010 and the “NOISE”, if we look at the statistics these announced supply are hardly enough to meet even Singapore’s local domestic needs, not to mention providing for the massive influx of foreigners and new Permanent Residents (PR). Ministry of National development got their numbers quite wrong. In that, they have under-supplied HDB flats to the tune of even up to 100,000 units (based on our estimates)

The fact that there is not a long queue at BTO registration (As claimed by some minister as indication of people not needing a home) itself does not mean that there is no latent demand as there are between 22,000 to 25,000 marriages each year. (http://propertybuyer.com.sg/articles/singapore-property-investor-buyer/why-singapore-property-prices-go-crazy/) This probably reflects the various complicated paper work and bureaucratic costs imposed as well as the people not being able to afford the supply of such HDB BTO flats.

Supply From Balance HDB Flats

Supply of HDB flats are from current balanced stocks are also in short supply.

There are not much supply from Balance flats as well. “The flats offered in the Sale of Balance Flats exercise are mostly under construction or near completion. Because of strong interest for such flats, the chances of getting a flat in the Sale of Balance Flats exercise are slim. Property Buyers who are not invited to select a flat can consider applying for a new flat under the BTO system, which is where HDB’s main supply for flats comes from.”

(http://www.hdb.gov.sg/fi10/fi10321p.nsf/w/BuyingNewFlatSBF?OpenDocument)

There are hardly any supply of balance units, so the only way to go will be to buy from the HDB Build-to-order (BTO) market.

(http://www.hdb.gov.sg/fi10/fi10321p.nsf/w/BuyingNewFlatModeBTO?OpenDocument)

That means that the current shortage of HDB supply will stay at least until some of the proposed Build-to-order flats are completed. And more of such BTO sites will need to be launched, sold and completed. And the time frame for that will be 2 to 4 years considering that it takes on average 2 years to complete a HDB building project.

HDB Property Supply From BTO Launches

Let’s take a look at the supply of HDB flats from Build-to-order to be launched. There are only 5,500 units of HDB flats (Remember, we estimate that there is a demand of 22,000 to 25,000 of housing needs due to household formation, i.e. marriages)

Sentosa Cove - The OceanFront Condo

Sentosa Cove - The OceanFront Condo



Investing in Singapore takes many forms. If you want to invest in a Singapore property, there are many to choose from. Make sure you choose the right ones. Are you looking for luxury or style or simply a place to stay while you conduct your daily business?

Contact a Mortgage Broker before you start your search or

SMS: 9782 8606 for your mortgage needs to find out how to finance a property first.

Property Buyer spins off home loan consultancy to www.SingaporeHomeLoan.net

Property Buyer, a Singapore based property portal is soft launching its revamped site with additional search engine application dedicated to finding real estate properties within Singapore. The company also is transferring its home loan functions to its sister website SingaporeHomeLoan dot net while maintaining a mortgage section at http://www.propertyBuyer.com.sg/mortgage for continuity.

The same team of home loan consultants will continue to service loan inquiries from both websites (the change over will be transparent for users) and will continue to be branded, “Property Buyer Mortgage Consultants,” with expertise on property buying loan consulting activities for high net worth individuals as well as the generic property loan refinancing activities.

This split will allow the two websites to be more focused in developing their own growth path while maintaining a symbiotic inter-dependence on each other as people who need home loans may need to look at properties and vice-versa.

Focus Of Singapore Home Loan Website

The new focus of SingaporeHomeLoan dot net (Property Buyer Mortgage Consultants) will be around providing better tools and data around loan comparisons to facilitate buyers to make an informed financing decision.
After the re-organization, the brand “Property Buyer Mortgage Consultants” will be used by http://www.SingaporeHomeLoan.net to ensure continuity. Property Buyer is a research focused mortgage consultant that does research into property economics as well as issues and regulations affecting property prices.

Focus Of Property Buyer Website

Property Buyer website continues to be the flagship website for the company and will continue to have a loans consultancy section within it’s website at Property Buyer Mortgage. The split will enable Property Buyer to break free from having to work around a home loans focus and to concentrate on providing tools, developing products as well as functionality that helps buyers to make the property buying process simpler and less risky. With the re-organization, the website will develop more revenue sources for the website around the property and wealth related segment.

The Managing Director of Property Buyer says, “We are pleased with our increased market presence so far. Currently “Propertybuyer.com.sg has a three-month global Alexa traffic rank of 1,091,767. The site is relatively popular among users in the city of Singapore (where it is ranked #4,876).” (Alexa, 21st July 2011) The split is more psychological in nature, as it frees up creative space to develop tools, products and services that is relevant to each website’s needs. And therefore we can better meet customers and readers expectations. We can develop more business successes only if and when we provide what the market is looking for.”

About Property Buyer

Property Buyer Mortgage Consultants is a research-focused mortgage advisory that helps property buyers look through hundreds of loan packages to find the best package that fits their financial circumstances, not simply some cheap loan packages. Property Buyer (CoreConcept Systems Pte Ltd) is a registered mortgage broker in Singapore. (Business registration 200618162C) with it’s office at No. 8 Liang Seah Street, #02-01 Liang Seah Court, Singapore 189029. Property buyer is also probably the only mortgage consultant in Singapore that produces research, not simply FAQs.

About The Company

All the websites and brands belong to CoreConcept Systems Pte Ltd. The company is focused on using technology to innovate traditional business segments and to use web technologies to bring to market, products and services. The company’s other divisions provides Search Engine Optimization (both English language as well as Chinese languages), Social media marketing and consulting, management consulting as well as professional career coaching and entrepreneurial start-up programs.

PropertyBuyer Mortgage Consultant
Home Loan Calculator
+65-9782-8606

loans@propertybuyer.com.sg

New social Media for Singapore property listings

New social media for Singapore Property listings 

by www.PropertyListings.asia


What is New media? What does it generally include? Is there a business case to learn so many new stuff?

What is defined as new? Generally the internet and social networking sites are considered new forms of communication platform or media.



Brief review of forms of internet media



What are blogs and what are websites?

Blogs are originally sites hosted by others where you can post your own content. Websites are internet media where you own the domain name and you also host the site. Therefore you are not under the mercy of the blog operator's rules.

Image sites

There are many sites that allows you to upload pictures for sharing with friends. These sites such as Flikr, google’s Picasa, photobucket and many others allow you to upload your photos to share with your friends and family. If you are a property agent in Singapore, you could share the pictures of the Singapore property listings you had just taken with your potential customers. Some sites allow you to embed the code into your websites to show the photos. This saves you website space.

Video Sites



Video sites are many. Youtube is the most popular video site, but others are aplenty such as Vimeo, Youku, Tudou and many others. You could embed the video into your websites or you could simply post video footage of the property you are trying to sell.



Social networking media



Social media refers to sites where people congregate, either to do something or to participate in an activity or discussion. There are many forms of social media, facebook is a major one where people participate to play games, to talk to comment on groups and many other things. Facebook has become the biggest social media site worldwide. You can start your own group and invite your friends into your property listings group. All such groups will take time to grow. Alternatively you can market the group or fanpage using advertisements to grow it’s numbers. Do be careful though, places where people congregate, there are social etiquettes to follow. When you are trying to sell something in a social setting, please be tactful and discreet or else your efforts will backfire and your brand may suffer as a result.



Special interest group social sites



Some sites are more focused on music and entertainment such as Myspace. Then the are also others such as matchmake and adult friend finder and many adult social sites. These are probably not appropriate for property listings and will most likely be not effective for your needs. The other sites are Friendsters, Bebo, Orkut, Renren, h15, perfspot, zorpia, netlog, habbo, xiaonei, 5q, yeejee, kai xin wang, 51, Fanfou, Twitter, etc.



Social share and bookmarking sites



As there are too many websites out there. Some sites have spruced up to use people's votes or "choices" or "Likes" to rank websites. These websites are them served to users as the preferred websites. There are many interest groups within these sites. There are many sites that allows people to rank favourite websites and serve it to their users. You need to know that these are also powerful forces to reckon with. These sites are Delicious, Digg, reddit, stumbleupon, Hubpages, squidoo, yahoo buzz, google bookmarks and MSN network.



Therefore, new media is not necessarily a holy grail. But it is definitely a bed of roses with thorns. Once you remove the thorns, you can enjoy the roses.



How to succeed in new media depends on how you are able to get persistent visitor traffic that are not only relevant and cheap to acquire. If you do not have too much worry about acquiring clients, then you can focus more on serving them.



If you want to sell your property, you will need to master these skills in order to market effectively on the internet. Consider talking to the Searh Engine Optimisation and Social media consultants to help you in creating and successful and sustainable business on the new media.

Write to info@propertylistings.asia

Invest in Singapore: Be careful of tricks property agents play on Option to purchase

Invest in Singapore: be careful Tricks agents play on Option to purchase in Singapore

Option to purchase OTP in Singapore. An option to purchase is a prelude to buying a property in Singapore. An option to purchase gives the purchaser the right to buy a property within a given time window at an agreed price, but not the obligation to do.



Bad Property deal Practices by dishonest Property agents regarding OTP Option to purchase



We treat any act that puts the interest of the buyer and seller last as unethical and bad practices.



Some Bad Singapore Property agents want the seller to sign an Option to Purchase document leaving out the date and the price unfilled. This puts the seller at risks of selling accidentally below cost and gives a potential dishonest property agent a chance of a quick sale which could costs the Owner hundreds of thousands of dollars.



On the buying side , the unethical property agents trick the property buyers into making an offer, believing that the price is agreed.



In this scenario , Dishonest agent dupes buying into believing that the deal is sealed at $1.23m, and this is the agreed asking price.

So the Property buyer makes an offer and pays a deposit for the option to purchase of $12,300 for the property. The Dishonest property agent then banks this cheque into the property owner bank account . He/she forces or sweet talk the Seller into agreeing to the deal.



In case the Property seller refuses, the property buyer is stuck while his/her cheque is already cashed by the property seller. Then the Property agent uses delay tactics to delay returning the money.

This causes buyers much worry. When they are most anxious , the dishonest property agent will offer a solution to help negotiate with the seller.



Be really angry if you will because , during this time, the crooked property agent may ask for some fee for "doing you a favour".



In case this does not work, he/she may come back telling you that the property selling wants $1.31m instead of $1.23m. And since your Option to purchase money is stuck and the Dishonest property agent has no intention of returning you the money easily (even if it is not them who kept the money), some buyers may be tricked into paying more. BINGO, the deal is done! The deal is closed!!!



We are no match for the Dishonest Singapore Property agent, they are smooth

The common man or woman on the street is usually no match for the dishonest property agents as even very senior executives get cheated. Nothing to be ashamed of, because these people have an innocent face and are genuinely cunning. But of course, there are a small fraction of honest singapore agents out here, you just have to look very hard.



A new bad development in our opinion. This practice stems from a botched deals where smart buyers discovered last minute that something is not quite right and cancelled the cheque.



Since these buyers actually do outsmart the property agents and agencies, something needs to be done to protect the interests of the Property agencies and property agents.



So they came up with a document called OFFER TO PURCHASE. An offer to purchase may hold legal weight or it may simply function more like an acknowledgement slip. But the terms of the offer needs to be carefully evaluated.



Do check through on the terms and make sure that they are reasonable for an Offer to purchase and that you have the right to rescind the offer should it not be accepted within 3 days. If possible, post date your cheque. And that you must also specify your rights such as "the offer is valid upon a reasonable and satisfactory terms stated within the Option to purchase" or words to that effect.

What if a Buyer offers to purchase and it is accepted and the subsequent Option to purchase comes, but with terms that are UNFAIR and not acceptable? Does that mean that the Property Buyer has also accepted the terms and conditions of the Option to Purchase?

Will Dishonest property agents show you an Option to purchase OTP document for your review?

Try asking them to provide you a copy of the Option to purchase, 9 out of 10 will be most reluctant to show you. Since the agencies drafted the Option to purchase documents, it usually favours the agencies and the agents and sometimes to the detriment of the Property seller and buyers. Those rare agent who may be willing to show you may be new to the trade.

So if a Singapore Property agent asks you to offer a cheque and sign an OFFER to purchase, ask them to send you both documents for your review first. And have the terms and conditions of an Option to purchase included in the offer to purchase. Otherwise you may be signing a blank cheque.

If worried , you can sms Property Buyer Singapore Mortgage Consultants at +65 - 9782-8606 in Singapore or email them at loans@propertybuyer.com.sg to guide you through the minefield of Dishonest Singapore Property agents. They have crossed swords with property agents in protecting buyer's and seller's interests in many occasions.



Should the Property Buyer sign the Option to Purchase?


Only the rightful sellers needs to sign the option to purchase. There is no need for property buyers to sign the Option to purchase. The property buyer only needs to have the original signed copy of the option to purchase in their possession. Do not leave the original copy with the Property agent!!!

Beware of letting your agent handle your original option to purchase document. They can easily sub-sale your property without you knowing about it, simply by filling in the name of the buyers if it is not filled in.



During property hype , we have heard that some agents who held copies of the original option to purchase managed to flip the properties for higher price making the difference. When the original buyers wanted to exercise option, they did not want to HAND OVER the ORIGINAL option to purchase. The buyers have no recourse as they do not have the original OTP and cannot exercise the option.



Some of the option to purchase contains a section called "And / or nominees". If the names of the buyer and the and /or nominee section is NOT filled up, then the BUYER needs to hold the original copy of the option to purchase OTP.



Some crooked Singapore Property agents may take your original OTP , make copies and then submit it to many banks to try and secure property loans from their favourite bankers and lawyers from which they have an under-table deal. These rogued lawyers then over-charge you and pay the dishonest agent a commission , which is illegal.



Is your Singapore Property agent too eager to introduce to you a bank, a banker to you? RUN for your life.

Is your property realtor too eager to recommend a lawyer or law firm? RUN for your life.

Is your Singapore property agent too keen to recommend you a contractor? RUN for your life.



Singapore property agents don't do things for free, just try asking them to give you some comparisons and some paperwork, they will try all ways to turn it away. Many are lazy and yet want to make money. If they are too keen, something's fishy. Just tell them firmly, NO thank you. We will find our own contractors, our own bankers, our own mortgage consultants and our own lawyers. Check with your close friends who are not agents to find out.



Many people in Singapore do not buy property regularly , so naturally, you may need a Singapore Mortgage Consultant at loans@propertyBuyer.com.sg who has no stake and no commission in property buying. Propertybuyer.com.sg offers free mortgage advice and property buying guidance for free. They offer their services for free to property buyers in selecting home loans as they fill the role of independent and unbiased outsourced bankers. Banks would need to incur staffing cost if not for mortgage consultants, therefore this service is offered to you free of charge at sms (text) +65 9782 8606.

Invest in Singapore Properties

Invest in Singapore Properties: Home loans using two borrower and Three mortgagors.

The economic climate has recovered. The recession seems a distant memory (even though it’s only 1 year ago). Many banks have relaxed credit, including banks such as DBS, OCBC, Maybank and recently HSBC, Bank of China. And from our experience and sampling working with the banks, the easing of credit from the bank is rather across the board.

Recently up until June 2009, credit was very tight. Very high barriers were set up to qualify whether to lend out money. Property buyers or investors have a tough time to get any housing or property loans approved if they are sharing a property with multiple non-related parties. Even if they are buying an investment property, many banks would require them to put up 30% down-payment. This means a 70% loan of the property valuation.

Any complicated Singapore property deals is almost impossible with extensive processing time and uncertain end-result.

Refinancing mortgages in Singapore is equally hard as property values plummeted with loans outstanding greater than 80% of the valuation of the property.

Investing and Sharing a property in Singapore

Many family members and friends tend to get together to buy a second or third property. This phenomenon is getting more common as far as our mortgage consultancy – broker has experienced.

Usually all will share in putting up the cash for the down-payment and all will become borrowers.

Recently, Property buyers have found an innovative way to borrow for your Singapore property loans.

Many of the so called “Property Gurus or experts” with property buying or investing systems or those, “How I manage to own a multi-million dollar portfolio earning $2500 a month” are also mainly using similar ways. We will delve into the risks in the later paragraphs, remember, there are no free-lunch. Many are dishing out standard generic advice, masquerading as divine investment and view of the future.


Let us now explain how it works.

One would avail cash for down-payment while the others will make their cash flow available so as to borrow large sums of funds.

For example, Property Buying amongst three people (real example, fictitious people), Oliver, Soon Huat and Kim Seng.

Do you want to know how Oliver and Soon Huat can buy a property without having CASH down-payment?

Do you want to know how Oliver and Soon Huat can buy a property without the cash down-payment?

• Oliver earns $2000 a month
• Soon Huat earns $5000 a month
• Kim Seng is a retired cousin, who has lots of cash, but no cash flow. Cash in excess of $400,000.

Property loans Borrowers

• Oliver and Soon Huat are borrowers.

Using a very relaxed criteria and barrier, they may be able to borrow up to $800,000 to $940,000 if they have no other financial commitment and are eligible to borrow over 30 years. (Maximum loan quantum is very risky, you have to assess your risks. The amount illustrated are estimates, banks have final say in actual amount of lending offered)

Based on the cash flow (salary) of Oliver and Soon Huat, they would be able to afford to buy a property in the range of $1m to $1.175m.

What is the Cash down-payment?

The cash down-payment required would be $200,000 to $235,000.

Since Oliver and Soon Huat did not have cash, Kim Seng who is retired and seeking an investment would pay the $200,000 to $235,000 cash plus stamp duty for it.

How does the Property Buyer Investment system work?

PROPERTY LOAN BORROWERS

• Oliver and Soon Huat would make available the cash flow (salary) so that they can borrow money to buy an expensive property.
• Kim Seng would pay the cash down-payment.

PROPERTY OWNERS – Mortgagors

• Oliver, Soon Huat and Kim Seng are all co-owners and mortgagors.
• The apportionment of the asset share is agreed by the property investors in private. They can do so under the tenancy-in-common structure.

Oliver, Soon Huat maxed out their Property borrowing capacity.

The Singapore property loan was based on Oliver and Soon Huat’s credit standing and cash flow.

Since Kim Seng is the Mortgagor (owner) and not the borrower, his credit assessment is not being looked at. (Not all banks allow this)

What are the risks for Borrowers and owners of such Property Investments structures?

Oliver and or Soon Huat lose their jobs, they will be unable to repay their installment if they have no savings.

The Singapore property loan – mortgage will be in default.

Soon the bank will likely serve notice to pay up to borrowers or mortgagors (owners).

Hence, the end result is, all people are liable for the loan, not simply the borrowers.

The bank will re-possess the property and put it up in the market for sale. If the sale comes short of the outstanding loan amount, all mortgagors and owners are likely to be liable. The bank may sue all three and recover whatever monies it can.

What is the RISK for Kim Seng the Financier of the property?

If Kim Seng finances the property deal and is himself involved in several such deals, he may be able to pass the cash flow requirement (because his credit and liability is not checked).

In case Kim Seng has many such properties, if One property falls through by default of payment or installment, Kim Seng will be exposed.

In addition to that,

Kim seng may be forced to pay up for any short-fall. Because if one or multiple properties default may cause a cascade of properties to fall.

These type of Singapore property buyers or investors typically rely on rental income. If rental income is not forthcoming, trouble will come very quickly.

Invest in Singapore Properties: Sibor or SOR rates

by: Property Buyer Home loans

If you are investing in Singapore properties and you want to know how safe is your cash flow? What can affect your property investing cash flow?

Rental rates can affect your revenue while the underlying Borrowing costs determined by Sibor and SOR can affect your Cost.

Which is safer? SIBOR rates or SOR rates?

In order to know the answer, we need to dwell deeper into how Sibor and SOR works in Singapore.

Setting Interest rate targets in USA and Singapore?

The USA is united from many states. There is a federal government and the state government. As the Federal government has certain rights and controls while the local government the others.

Therefore, the federal reserve uses rougher policy tools such as using interest rates to control inflation and regulate growth for the country while the local government does it's part.

Singapore on the other hand is small. The Singapore government can micro-manage. When the economy heats up and Consumer Price index (CPI) rises, instead of raising interest rates to control inflation, Singapore could raise it’s currency value against a trade weighted basket of currencies.

This reduces the prices of imports as the Singapore dollar strengthens. This has the effect of lowering inflation for Singapore citizens. However this also impacts certain industries which relies on exports.

SO DOES SINGAPORE GOVERNMENT SET AN INTEREST RATE TARGET?

Singapore’s interest rates are consistently set low. Though we are not sure “SET” is the right word. There are many factors including the liquidity of banks in Singapore which helps “SET” the interest rate environment.

Banks that are flushed with cash from depositor’s funds or it's own capital will release unused funds it into the Singapore Inter-bank market, made available to be borrowed by other financial institutions, for a small interest rate charge of course.

The rate is called, the Singapore Inter-bank offered Rate (SIBOR). This is the rate at which the banks lend to each other. Sibor is traded and published in the Association of banks of Singapore (ABS).

SOR is the Swap offered Rate also traded on the Association of Banks of Singapore.

SOR is a Swap. Swaps are basically derivatives contracts. These contracts are traded at a fairly high volume between the banks and financial institutions in Singapore.

SOR or Swap offered Rate is a benign form of Derivative which involves the US dollar and the Singapore dollar where banks trade with each other to borrow the funds. And the borrowed funds carry an interest rate. SOR is determined this way. Swap contracts behave a little like a share in a stock market.

Singapore’s interest rates are consistently lower than that of the US and that of Australia. This ensures that Gross Fixed capital formation is maintained at a higher level of which a significant portion goes into investment. Such as that of plant, machinery, software, etc. All of which could significantly enhance the long term productivity and efficiency of the Country.

Low Sibor and SOR rates drive investment driven inflation?

Singapore is not immune to inflation. However, due to the various policies tools at the disposal of the Singapore government, it can selectively target industries that are over-heating by imposing levies, taxes or restrictions while leaving the other industries which are not over-heating to continue to grow.

Thus Singapore’s micro-managed economy can maintain a higher growth rate due to long term lower interest rates driven by investments.

Australia's housing loans Interest rates are Crazy

Will Singapore’s interest rates reach the levels seen in Australia and US? It is hard to say whether Singapore will ever reach those rates seen in Australia or the USA, but on a comparative basis, Singapore’s interest rates tend to be lower than those in Australia and the USA.

Why will Singapore’s Sibor or SOR rates rise?

In most modern economies, credit is well developed. What this means is, when there are investments or economic activities, funds are being used up. For example, a project that costs $600 million may need financing of at least 60% of that fund.

That means the company who invests in that project only comes out with capital of $240 million while borrowing $360 million. Even the company’s investment of $240 million may also come from issuing shares or bonds of the company, leaving the actual capital of the investment lesser than $240 million.

In other words, investments deplete the funds available for lending into the Singapore inter-bank market. This leads to an investment activity based and economic expansion based rise of rates.

The other instance is when there are major economic shocks where we do not know how much are the banks exposed to these shocks. In such a scenario, each bank will view the other one with suspicion as they do not know whether they will get back their money if they leave lend it out. In such a scenario, the SIBOR or SOR rates move up very quickly. In such scenario, it is expected that the Singapore Government would intervene to provide the liquidity of the last resort, thereby stabilizing the market.

So it is safe to say, when investment grows, funds are sucked up because most investments are still credit driven in a developed economy like Singapore.

For Investors looking to invest in Singapore properties, it is important to understand the Singapore government's interest rate policy levers to estimate if you will be able to afford your Property loans in the coming future.

Master Lynn Yap Tiger Year Feng Shui Forecast 2010

Predict2010 1

View more presentations from Property Buyer Singapore.

Feng Shui forecast for Tiger year 2010 by Master Lynnyap

We are grateful for the support Master Lynn Yap have always given to this website.

Master Lynn Yap never ask for any favours in return for her help. And we at Property Buyer are truly honoured to have Master Lynn Yap as our Anchor Feng Shui master for this website.

It is of no surprise that Master Lynn Yap is well liked and popular because she is not only good in Feng Shui, but has a personality.

Here is her forecast for 2010.

Master Lynn Yap Feng Shui Forecast for Tiger year 2010.

Invest in Singapore Property: The Shore residences, Greenwood Terrace

Singapore Property buyer Investors Can buy Freehold land and sell as Leasehold

Contributed By www.PropertyBUYER.com.sg

Our blog is happy to receive articles and materials and publish them for you. In return, we will acknowledge your article with a working link back to your site.


In the last issue http://www.propertybuyer.com.sg/articles/singapore-property-investor-buyer/singapore-property-developers-buys-free-hold-land-and-sells-as-103-years-lease-hold/,

we investigate the possible implications of Singapore Property developers buying freehold land, developing it and then selling it as 103 years leasehold strata titled Condominium.

The Recent Launches such as (but not limited to) Far East's "The Shore residences" in the east coast as well as "Greenwood Terrace" in the prestigious greenwood vicinity of District 10 are such examples of the Singapore property developer buying Freehold land and launching as 103 years leasehold strata titled land.

Why do Singapore Property Buyers and Investors need to know?

Singapore property buyers and Investors need to know this because the future value of their condominium and cluster landed properties with Strata titles will be affected some 20 to 30 years down the road when the development becomes run-down.

What about Singapore property owners with Freehold or 999 Leasehold land titles?
For current Singapore property owners who owned landed properties with freehold or 999 leaasehold land titles, this means a potential future bonanza. Please read on, we have got the reply from Singapore land authority.

Reply from Singapore Land Authority (SLA) On Freehold land being sold as Leasehold strata titled developments.

"www.PropertyBUYER.com.sg:
We are doing a research for the benefit of our readers. Our website is
at
www.PropertyBUYER.com.sg and our readers have been urging us to enquire
about how Far East and numerous others have been able to acquire FREE
HOLD
land from the government (could be SLA) and then develop and sell the
properties as a 99 years property.

Could you please help us understand under what circumstances are
Developers
allowed to buy Free Hold land and re-sell as Lease hold land?

 We appreciate if you could point us to any such literature, web link,
 sites
 which explains these in greater details.


Singapore Land Authority:
Developers can buy freehold land through the private market. You 
should
 approach the developers for details on your queries as these are all
 private transactions.


"www.PropertyBUYER.com.sg:
Thank you for your reply.
We understand that developers can buy from the private market. But having
 said that, our readers would like to understand under what statute does 
it
 allow the developer to buy Free Hold land and then sell it as a 99 years
lease? 
Hope you can point us in the right direction.


Singapore Land Authority:
We refer to your enquiry dated 11 Jan 2010.
Common Law provides that a smaller interest in land can be carved out
 from 
a
 larger interest in land, with the registered proprietor/developer
 retaining
 a 
reversionary interest.

The duration of this smaller interest is not
 governed by 
any statutory provision.

 Hence it is acceptable for a developer to retain the reversionary
 Freehold 
title in a development and merely sell the strata lots in the development 
with 
a 103-year lease or any determinate number of years out of the Freehold 
title.

"

Good News for Singapore Property Owners with Freehold land
Singapore land authority has clarified that "Common Law provides that a smaller interest in land can be carved out from a larger interest in land, with the registered propietor/develop retaining a reversionary interest."

This means that you can possibly sell your landed property on a 99 years lease or any numbers of years lease as you deem fit if you sort out the legal paperwork.
This would mean that you will be able to pass on wealth to your descendants while selling properties while retaining the reversionary rights to freehold land.
Maybe you are stting on 3 or 4 Semi-detaches or Bungalows, you can't really lease it out to get a good cashflow and yet you don't want to sell it as you may not be able to buy another property in a similar good location and you need to grow your business.
What could you do?


Perhaps you can sell one or two of your Semi-detaches as leasehold while you maximise and free up capital and at the same time share in the upside the land can possibly provide.

Sad day for Singapore Property buyers


For Singapore property buyers, it means that more and more property developers will likely get in on the strategy to retain the freehold title while selling developments as Strata title leasehold. Freehold land may gradually disappear into the hands of the well funded and rich property developers.

About Property Buyer Contact Property Buyer

www.PropertyBUYER.com.sg
We are a Research-focused Singapore Mortgage Consultant which helps you compare Singapore Home loans either for new home loans or refinance home loans, we balance risks versus rewards for each home loan to match your risk profile and financing needs.

Buying property is a serious affair, we do NOT advocate a Greed or fear based buying approach, we emphasize that you need to check your property home loan affordability. Check out the mortgage calculators or call us so as to do your sums right.


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