Marketing of Residential Properties Flashcards
Reasons for selling residential buildings
- Family expansion
- Rising family income
- Divorce/Separations
- Growth children moved out
- Retirements
- Unemployment
Government Intervention That Affects Residential Market
- Restriction on Ownership of Residential Properties
- Taxes and Duties
- Financing
- Controls on Developers (Land supply, proportion of small units, taxes, time to sell off etc)
Ownership Restriction for Residential Properties in Singapore for Forgieners
Foreigners and permanent residents need written approval from the Minister of Law for the purchase of:
- Landed residential properties
- Vacant residential land
- Landed property in non-condominium strata developments
Application Process for foreigners made to who
- Controller of Residential Property via Land Dealings (Approval) Unit
Who can apply to Controller of Residential Property via Land Dealings
(Approval) Unit
- pr of at least 5 years
- foreigners who are of economic benefit to SG or make exceptional economic contribution to SG
- foreigners who possess professional or other qualifications or experience which are of value or benefit to Singapore
Foreigners can buy what?
- condo
- flats
- strata landed
- leasehold estates in landed residential property for a term not exceeding 7 years
- if wanna buy all units in a development, must first obtain approval
Types of Stamp Duties in Singapore
- Buyer’s Stamp Duty (BSD)
- Additional Buyer’s Stamp Duty (ABSD)
- Seller’s Stamp Duty (SSD)
Buyer’s Stamp Duty (BSD)
- For all properties
- Had effect from 20 Feb 2018
- First $180,000 –>1%
- Next $180,000 –> 2%
- Next $640,000 –>3%
- Remaining Amount –> 4%
Additional Buyer’s Stamp Duty (ABSD)
- Buyers who already owned residential properties have to pay ABSD if they are buying 2nd or subsequent properties
Seller’s Stamp Duty (SSD)
- from 11 march 2017
- within 1 year –> 12%
- More than 1 year and up to 2 years –> 8%
- More than 2 years and up to 3 years –> 4%
Loan Ceiling: Loan To Value (LTV)
-Applicability: Housing loans for property purchases.
- Reduction: Financial Institutions reduce loan ceilings by 5%.
- Limits: Ranges from 15% to 75% based on the borrower’s outstanding housing loans.
- Requirement: Buyers must have sufficient CPF funds and savings to cover the balance.
Total Debt Servicing Ratio (TDSR)
- Effective Date: Implemented from 16 December 2021.
- Cap: Set at 55% of the property buyer’s income.
- Applicability: Applies to individuals taking loans for all types of property and covers car and credit card loans.
- Income Discount: 30% of the borrower’s variable income (e.g., bonuses, rental income) is discounted.
- Restriction: Once 55% of the borrower’s income is committed to existing debts, no further housing loan can be borrowed.
Minimum Cash Payment (MCP)
- Requirement: Individuals taking a 2nd or 3rd housing loan must pay a 25% cash downpayment.
- First Bank Loan: 5% to 10% cash downpayment required.
Factors affecting pricing of residential properties
- Location
- Accessibility
- Condition
- Size, shape. and frontage
- Layout and Design
- Environment
- Height and View
- Facilities
- Tenure
- Market Trend
- Redevelopment potential
Location factor in pricing of residential properties
- MOST IMPORTANT FACTOR
- Address such as which area of SG it is (which district, which planning town etc)
- Sitting
- Proximity to amenities
