Deputy Prime Minister and Finance Minister Heng Swee Keat said that the Government is paying “close attention” to the local real estate market “to ensure that it remains stable”. As the economic outlook remains very uncertain, he added, “we do not want to see the property market run ahead of the underlying economic fundamentals”.
Hence here are some possible cooling measures that experts foresee may happen in 2021:-
Government may implement a marginal reduction in LTVs for first loans, a more aggressive reduction in LTVs for second and subsequent loans, higher seller stamp duties, and/or longer seller stamp duty periods.
In addition, there is a possibility that the government will decide to implement HDB-specific property curbs, according to Jason Tan, Senior Associate Executive Director at OrangeTee & Tie.
Based on past experience, the government is likely to act swiftly and decisively when putting in place new property curbs without giving the market much time to react.
There is a good chance the measures will be announced in the second half of 2021 if price continues to trend upwards in the next two quarters.
Measures affecting loans, such as MSR and LTV, are likely to be tightened, and there is also the possibility of rules targeted at HDB transactions.