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Condo PSF

Today I want to talk about psf (per square foot).

Property market is booming like nobody business and the prices can be as volatile as the share market (up but hardly down). 

When I first came to Singapore (that was about 4 years ago), many people told me that the rental has boom significantly just merely compared to a year before.  A typical 3-room (2 bedrooms) HDB can fetched rental of $1,500 – $1,700 (I was told that a year before was $1,000 only) and rental yield of approximately 10%! Four years down the road and guess how much is the rental for the similar unit? It can easily fetch $2,200 to $2,400 (40% increment), which was faster than our salary increment!  Not to mention about the inflation of other consumptions.

Condo prices have continue to increase despite recent cooling measures introduced by the government simply because too much liquidity in the market!  These are the cooling measures:

1) Restricted loan financing (LTA 80%)

2) Seller Stamp Duty

3) Additional Buyer Stamp Duty

4) Restricted loan financing (Loan period ≤ 35 years)

I would say these measures will have the biggest negative impact on first time home buyer or small investors (hoping to earn some money) but have very little impact on the rich. 

Although Singapore is in general small, but prices for different district can be varied.  Just take new leasehold condo with 2 bedrooms for example, prices psf now can be in the range of:

                                                                S$ psf

Central                                                 above 2000

North (Novena/ AMK)                   1600 – 1800

East                                                        1000 – 1200

West                                                     1000 – 1200 (can be slightly lower as compared to the east)

In short, you got to pay S$1,000psf to get a decent and accessible unit (2 times of the price as compared to 10 years ago).  This is such as a worrying trend -__-

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Homeless

I decided to write a post today because technically I am homeless now =(

Actually the feeling of being homeless is not too bad because I am less stressful now as I do not have any liabilities (for a few days Lol).

I am so in-to property that I always wanted to share a lot of things but I have no time -__-

Basically, property is my heart and soul and basically my motivation of living in the earth!  You must trust what property can do for you and change your life.

However, things are getting tougher especially with the stringent government regulation.  Let me share with you the latest,

Wef of 6 Oct 2012, the maximum tenure of all new residential property loans will be capped at 35 years (previously no such rule!)

For individual buyer, if

– the tenure exceeds 30 years; or

– the loan period exends beyond the retirement age of 65 years.

The LTV limit will be:

40% (previously 70%) for a borrower with one or more outstanding residential property loans ; and

60% (previously 80%) for a borrower with no outstanding residential property loan

(MAS circular dated 5 Oct 2012)

How does all these affect you?

Personally, I would say this new measure would affect two groups of people, i.e.

1) Young borrower, typically under 30 years old; and

2) Investors (bought for capital appreciation).

Let’s take 1 example:

Purchase price   1,000,000
     
60% LTV   600,000
     
40%   400,000
Stamp Duty   24,600
Pay by cash   412,600

 Tell me how many of you from an average family can afford to fork out this amount of cash?