If you think property prices are too high, you are not alone.
The URA indexes for rest of central region and outside central region are at an all-time high.
According to the new NUS Singapore Residential Price Index (SRPI), its index for non-central region has also surpassed way beyond the 2007 peak.
When even the above-average earners feel they can’t afford a home, something must be wrong and something ought to be done.
And the government has indeed implemented several cooling measures, including releasing more land for sale, lowering the mortgage loan-to-value limit from 90% to 80% (a reversal of the 2005 relaxation), and imposing a stamp duty on properties flipped within a year.
Nobody knows if property prices will stay high or even go higher. But we can make an educated guess.
If we look back to 2005, the year when the government implemented policy changes to boost the property market, we will see that policies take time to have an impact.
In 2005, the government relaxed the restriction on foreign ownership of apartments (no more 6-storeys rule), upped the maximum loan-to-value limit from 80% to 90%, reduced the cash down payment from 10% to just 5%, and allowed non-related singles to jointly purchase residential properties.
Also in 2005, the government gave the green light for the 2 integrated resorts.
The effects of all these took about 2 years to weave into the property market, when prices went up a steep slope in 2007 before finally reaching a record high in 2008.
Of course, other factors also played a part, like a buoyant US economy and its subprime traps.
In a similar way, the effects of recent policy changes will take time to affect the market.
When do you think the property market will face a correction?