Changes to Property Rules and the Effects
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Here's a summary of the changes introduced by Mah Bow Tan in Parliament on 19 July 2005:
Housing Loans
Banks may grant housing loans up to 90% of property value, up from the previous limit of 80%, with immediate effect. This applies to both private residential properties and HDB flats Cash Downpayment for Private homes halved frm 10% to 5%, with immediate effect. Cash downpayment for HDB flats bought with bank loans reduced to 5% from jan 1, 2006, down from the orignally slated 6%. It was supposed to rise gradually to 10% in 2008. THose buying flats with loans from HDB will still be allowed to make the full 10% downpayment with CPF savings as before. MAS require banks to hold more capital against housing loans which exceed 80% of property value. But it may consider mortgage insurance for banks as an alternative.
CPF changes CPF Savings can be used to buy private homes with remaining leases of 30 to 59 years with immediate effect. Previously, only private homes with remining leases of at least 60 years could be bought using CPF savings. Non-related singles allowed to use their CPF savings to jointly buy private homes with immediate effect, in sync with prevailing rule for HDB flat. Available Housing Withdrawal Limit simplified, wit hthe limit now set only to the available Ordinary Account balance after leaving aside the Minium Sum cash component. Governmetn's plans to reduce CPF withdrawal limit for housing expenditure to 120% of the property valuation by 2008 remains unchanged. Medisave Account overflows will now be transfered into the Special Account for members aged below 55 and into the Retirement Account for those 55 and above, instead of into the Ordinary Account. The effective date is set for July 1 2006. Only CPF savings in the Ordinary Account in excess of the Minimum Sum cash component can be used for the purchase of second and subsequent properties. No new applications in the Ordinary Account in excess of the Minimum Sum cash componet can be used for the purchase of second and subsequent properties. No new applications to use CPF savings to fund purchases of non-residential properties will be allowed from July 1, 2006
Foreign Property Ownership Under a new option to the EDB's Global Investor Programme, a foreigner can be considered for permanent resident if he invests at least $2 million in business set-ups, other investment vehicles such as venture capital funds, foundations or trusts, and/or private residential properties. Up to 50 per cent of the investment can be in private residential properties. Foreigners can buy apartments in non-condo developments of less than six levels without the need to obtain prior approval. The new rules will take immediate effect. for landed properties, prior approval is still needed. Government revokes, with immediate effect, the exemption status of 43 companies currently exempted from appling for a Qualifying Certificate when they buy residential land for development. To lower costs, the amount of a banker's guarantee that developers need to furnish will be reduced from 50% to 10% of the land price. The period allowed for completing developments is also xtended from the current 3 to 4 years to 6 years.
source: Business Times 20/7/2005
So far, there have been much discussion to the changes to housing loans. how about your views on the other 2 (CPF and Foreign Ownership)? -
wah biang eh.. just one day after the announcements and they are already rising i/r liao..
Home loan rates may be on the rise with DBS hiking rates by 1%
By Loh Kim Chin, Channel NewsAsia
Posted: 20 July 2005 2332 hrs
SINGAPORE : Interest rates for home loans may be on the way up.
DBS fired the first salvo by hiking its floating rates by 1 percentage point for the initial two years.
The rate is 1.5 percentage points higher for subsequent years.
The new rates apply only to those who apply for loans up to the 90 percent limit.
They take into account the higher capital requirements by the Monetary Authority.
OCBC will announce its new package on Thursday, while UOB says it is monitoring the market closely and will respond to changing conditions and customer needs.
...
- CNA /ls
For full story, see: http://www.channelnewsasia.com/stories/singaporebusinessnews/view/158925/1/.html
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Business Times
According to Straits Times, this is a win-win situation deal. For Simon Cheong gets the $$ to buy more Vantage shares.
Published July 21, 2005
Oei Hong Leong to take 8.3% stake in SC Global
Simon Cheong's firm raising $23.6mfrom placement of shares to 3 parties
By MICHELLE QUAH
SIMON Cheong's SC Global Developments has roped in tycoon Oei Hong Leong as an investor, in a deal that will see Mr Oei's Chip Lian Investments pay $11.8 million for an 8.3 per cent stake in SC Global.
...
SC Global - a niche developer of high-end properties, including Ladyhill, BLVD and The Lincoln Modern - recently upped its offer for Vantage Corporation, a shell company with an attractive cash trove of $55.7 million. Analysts have said that this cash hoard will come in handy for SC Global's property developments.
SC Global is now offering to buy all the Vantage shares it does not own at 26 cents each - based on a per-share bid of 12.5 cents in cash and 0.11 of a new SC Global share. Mr Cheong currently owns about 8 per cent of Vantage.
For Oei Hong Leong, he made this deal on the day the changes was announced. ST suggested that Oei bought into SC Global cos he was eyeing the high-end property market, probably cos he expect the changes to have a positive impact on that sector.
smart man and decisive execution.. *impressed* -
OCBC has annouced its rates are raised by 1 percentage point across the board for all private and HDB properties.
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UOB UNVEILS '90%' HOME LOAN
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Joins OCBC, DBS in offering new packages since changes in property rules
Val Chua
[email protected]
United Overseas Bank (UOB) has become the third bank in Singapore to come
out with higher interest rate packages for those seeking housing loans of
up to 90 per cent of the value of their homes.
Its two new packages - for fixed and floating rates - follow similar moves
by rivals OCBC Bank and DBS in the last few days, after the Government
relaxed home financing rules on Tuesday.
The new rates for UOB are one-third higher than those for loans of up to
80 per cent, the previous ceiling for home buyers.
Under its fixed rate package, UOB is charging 3.5 per cent for the first
year, and 4.5 per cent for the second and third years, a total of 12.5 per
cent. Under its 80-per-cent package, the interest rates for the first
three years amount to 9.5 per cent .
For its floating rate package, the bank is charging 3, 4 and 4.5 per cent
for the first, second and third year, respectively. This works out to 11.5
per cent for the first three years, compared to 8.5 per cent under the
80-per-cent package.
The same higher rates apply for HDB flat buyers who are seeking 90 per
cent loans.
The difference: The minimum loan amount is $200,000 for private property
buyers, but $100,000 for those buying public flats.
"The new packages are introduced to reflect the higher capital
requirement, and are part of our strategy to provide total home solutions
to home buyers," said UOB Loans Division first vice-president and head
Kevin Lam.
When contacted, foreign banks such as Maybank, Citibank, Standard
Chartered and HSBC said that they were "reviewing" their home loan rates.
Hong Leong Finance had said that it was maintaining all its existing loan
rates for private and HDB properties.
A spokeswoman for ABN Amro also said said that its existing rates apply to
those who need 90-per-cent financing. -
So far, the only good effect of this news is that my portfolio has increased by another 8%.
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I happened to be holding DBS warrants.. thanks to the news, the price doubled! made a healthy profit.. haha.
(in fact if you bought it at the low, the returns would have been 400%)
But ultimately, the problem with property market is still oversupply.. even with these measures, doubt if it will change anything in the short run.. probably any reactions will be knee-jerk. What you think? -
Can somebody teach me how to trade warrants? Im not sure about investing in warrants....but I know how to invest in futures...Originally posted by k4korny:I happened to be holding DBS warrants.. thanks to the news, the price doubled! made a healthy profit.. haha.
(in fact if you bought it at the low, the returns would have been 400%)
But ultimately, the problem with property market is still oversupply.. even with these measures, doubt if it will change anything in the short run.. probably any reactions will be knee-jerk. What you think?
Yes. I believe this is just a knee-jerk reaction. The property market is still suffering from an oversupply, but prime properties are still in demand. -
wah... Structured warrants are a big topic. It's like trading derivatives, except that instead of trading Commodities, Indices, etc... you are trading the contracts for the Stocks in the stockmarket. (erm.. sounds too cheem huh..)Originally posted by shade343:Can somebody teach me how to trade warrants? Im not sure about investing in warrants....but I know how to invest in futures...
Anyway, here are somelink
Deutche Bank has a good source of info and learning materials: http://www.dbwarrants.com.sg
SGX:
http://info.sgx.com/SGXWeb_ST.nsf/NEWDOCNAME/ST_Struct_Warrants?OpenDocument
SGX also hold beginnner and advanced talks for warrants regularly. If you're interested, I highly recommend you to attend these talks. Check out their website on Structured Warrant Seminars. Btw, it's free.