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Singapore will raise down payment requirements for second mortgages and extend the period homeowners must hold properties to avoid a sales tax as it steps up efforts to curb speculation after prices rose to a record.
Individuals with more than one mortgage can only borrow up to 60% of a property’s value, down from 70%, the government said in a statement yesterday. On loans to entities other than individuals it will be reduced to 50% from 60%. Sellers will now have to pay a stamp duty for all homes and land sold within four years of purchase, from three years.
Singapore private home prices climbed to a record as the nation’s fastest economic growth since independence in 1965 overwhelmed government measures to cool the market. The city- state has been attempting to rein in home prices since 2009 when the government barred interest-only loans for some housing projects and stopped allowing developers to cover interest payments for apartments still being built.
“The government is erring on the side of caution,” said Donald Han, Singapore-based managing director at Cushman & Wakefield, the world’s largest closely held real estate services company. “We need to monitor this because history has shown that some of these measures lasted only two to three months, and the market comes right back to full life again.”
While Singapore’s private home prices climbed 2.7% to a record in the fourth quarter from the previous three months, the increase was the smallest in six quarters, government data showed. Han said he expects the gain in home prices to cap at 5% this year with the latest curbs, from an earlier estimate of as much as 12%.
