Saturday, February 9, 2008
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Chronology of Major events that impact the Singapore property market (I): 1960 to 1997
A study of major events that impact the Singapore property market will better help one to predict the market trends, e.g. like which part of history is likely repeat itself etc. This topic covers events from 1960 to 2008. It reflects some perculiarities in the Singapore property market, largely the result of government policies. The topic concludes with an analysis of the implications of these events for predicting future trends.
1960
HDB formed to provide subsidised, high rise housing for Singaporeans.
12,000 flats built between 1960-70;
Property Tax introduced
1968
CPF implements Public Housing Schemes for home ownership (which sees 90% of Singaporeans owning their homes today).
1972
Inflow of foreign funds and the beginning of Singapore's golden years.
1973
Property curbs introduced: foreigners not allowed to buy residential properties; property tax surcharge w.e.f. 1974
1974
Oil Crisis which afflicted the US economy of which Singapore was very dependant on. The year saw a plunge in Singapore property price and Singaporeans learned how their home price has every thing to do with the US economy.
1976
Introduction of Residential Property Act: Foreigners allowed to purchase flats in buildings of 6 levels or higher.
Graph shows the Property Price Index (Click on the image to view details.)
1981
CPF implements Residential Properties Scheme for private home ownership which allowed Singaporeans to use up to 80% of their CPF ordinary account savings for property purchase. Property price rose 3 to 4 times e.g. HDB flats bought in the 1970s were in the range of $10K but in the 1980s, HDB flats typically cost $40K-$100K. (Note from the graph that the property price index rose from ~10 in the 1970s to ~50 in the 1980s)
1984/1985
Economic recession. (Note from the graph that the property price index fell from ~50 in the 1983's peak to ~30 in the 1986)
1987
CPF implements Minimum Sum Scheme to ensure that Singaporeans have enough CPF for their retirement.
1988
Total CPF withdrawal for the purchase of private housing increased to 100% of the value of the property (Nov 1988). Property price escalated.
1989 (Aug)
PRs allowed to buy HDB flats and HDB owners allowed to invest in private property.
1990 (Aug)
Gulf War - which saw a small dip in property price that lasted as quickly as US declared victory. Property price continued to escalate after that.
1991 (Oct)
HDB allowed single citizens above 35 to buy three-room flats
1993 (Oct)
CPF rules relaxed and home buyers allowed to withdraw larger CPF amounts and HDB flat buyers allowed to take higher mortgages. Property price started to soar.
1995 (Aug)
Government introduced Executive Condominium which were sold for about 10% less than 99-year lease condoniniums. The launches were heavily oversubscribed, typically with 10 applicants to 1 unit.
1996 (Feb)
The hottest period in the history of the Singapore property market. The year saw property price soared to its historical peak that's yet to be surpassed.
Exemption limit for owner-occupied property increased to the first $150,000 (previously $75,000) of its NAV; Exemption limits on estate duty for residential properties and movable assets, including CPF balances, raised to $9 million and $600,000 respectively. CPF balances in excess of $600,000 will continue to be exempt; property tax rate from 13% to 12%; Stamp duty adjustment on property transfers; reduction on stamp duty rates on property leases.
1996 (May)
Anti-speculation measures implemented - 80% financing restriction for property purchase; 7,000-8,000 residential units to be released in 1997; 30-month project completion period (PCP) for private developments under QC scheme; 5% p.a. penalty imposition for PCP extension; stamp duty extended to buyers of all sales and sub-sales of uncompleted properties; new stamp duty on those who sell properties within years; tax on gains from properties sold within 3 years of purchase. Property price fell for the first time after 10 long years of relentless up trend.
1997 (Feb) Budget 1997
The most turbulent year in the history of the Singapore property market.
Concessionary property tax rate of 4% on the annual value of the residential house for home owners who rebuild their houses for their own subsequent occupation during the period when their houses are undergoing reconstruction
1997
Measures to curb abuse of HDB subsidised mortgage e.g. HDB mortgage pegged to bank rate.
The Asian financial crisis. Property price plunged.
Reversal of Anti-speculation policy implemented in 1996.
To be continued ....
Chronology of major events that impact the Singapore property market(II): 1997 to 2003
May also want to read:
How to Calculate Rental Yield for Singapore Property
How to Calculate Property Tax for Singapore Property
Inland Revenue Authority of Singapore(IRAS): Stamp Duty Calculator
How to calculate Stamp Duty for Singapore Property
1960
HDB formed to provide subsidised, high rise housing for Singaporeans.
12,000 flats built between 1960-70;
Property Tax introduced
1968
CPF implements Public Housing Schemes for home ownership (which sees 90% of Singaporeans owning their homes today).
1972
Inflow of foreign funds and the beginning of Singapore's golden years.
1973
Property curbs introduced: foreigners not allowed to buy residential properties; property tax surcharge w.e.f. 1974
1974
Oil Crisis which afflicted the US economy of which Singapore was very dependant on. The year saw a plunge in Singapore property price and Singaporeans learned how their home price has every thing to do with the US economy.
1976
Introduction of Residential Property Act: Foreigners allowed to purchase flats in buildings of 6 levels or higher.
Graph shows the Property Price Index (Click on the image to view details.)
1981
CPF implements Residential Properties Scheme for private home ownership which allowed Singaporeans to use up to 80% of their CPF ordinary account savings for property purchase. Property price rose 3 to 4 times e.g. HDB flats bought in the 1970s were in the range of $10K but in the 1980s, HDB flats typically cost $40K-$100K. (Note from the graph that the property price index rose from ~10 in the 1970s to ~50 in the 1980s)
1984/1985
Economic recession. (Note from the graph that the property price index fell from ~50 in the 1983's peak to ~30 in the 1986)
1987
CPF implements Minimum Sum Scheme to ensure that Singaporeans have enough CPF for their retirement.
1988
Total CPF withdrawal for the purchase of private housing increased to 100% of the value of the property (Nov 1988). Property price escalated.
1989 (Aug)
PRs allowed to buy HDB flats and HDB owners allowed to invest in private property.
1990 (Aug)
Gulf War - which saw a small dip in property price that lasted as quickly as US declared victory. Property price continued to escalate after that.
1991 (Oct)
HDB allowed single citizens above 35 to buy three-room flats
1993 (Oct)
CPF rules relaxed and home buyers allowed to withdraw larger CPF amounts and HDB flat buyers allowed to take higher mortgages. Property price started to soar.
1995 (Aug)
Government introduced Executive Condominium which were sold for about 10% less than 99-year lease condoniniums. The launches were heavily oversubscribed, typically with 10 applicants to 1 unit.
1996 (Feb)
The hottest period in the history of the Singapore property market. The year saw property price soared to its historical peak that's yet to be surpassed.
Exemption limit for owner-occupied property increased to the first $150,000 (previously $75,000) of its NAV; Exemption limits on estate duty for residential properties and movable assets, including CPF balances, raised to $9 million and $600,000 respectively. CPF balances in excess of $600,000 will continue to be exempt; property tax rate from 13% to 12%; Stamp duty adjustment on property transfers; reduction on stamp duty rates on property leases.
1996 (May)
Anti-speculation measures implemented - 80% financing restriction for property purchase; 7,000-8,000 residential units to be released in 1997; 30-month project completion period (PCP) for private developments under QC scheme; 5% p.a. penalty imposition for PCP extension; stamp duty extended to buyers of all sales and sub-sales of uncompleted properties; new stamp duty on those who sell properties within years; tax on gains from properties sold within 3 years of purchase. Property price fell for the first time after 10 long years of relentless up trend.
1997 (Feb) Budget 1997
The most turbulent year in the history of the Singapore property market.
Concessionary property tax rate of 4% on the annual value of the residential house for home owners who rebuild their houses for their own subsequent occupation during the period when their houses are undergoing reconstruction
1997
Measures to curb abuse of HDB subsidised mortgage e.g. HDB mortgage pegged to bank rate.
The Asian financial crisis. Property price plunged.
Reversal of Anti-speculation policy implemented in 1996.
To be continued ....
Chronology of major events that impact the Singapore property market(II): 1997 to 2003
May also want to read:
How to Calculate Rental Yield for Singapore Property
How to Calculate Property Tax for Singapore Property
Inland Revenue Authority of Singapore(IRAS): Stamp Duty Calculator
How to calculate Stamp Duty for Singapore Property
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8 comments:
Hi!
Your blog is fantastic! Where did you get the Singapore Property History from?
Don't think I can start with "Dear Sweetheart", my wife ain't going to react too well to it:)
Well, info is from research of official sites plus my own memories of these events (yes, I was there betting with own money and learning from hard knocks of life).
hi, is there a way to find historical hdb launch price for past 5 years?
hi, try HDB website...
Hello,
Nice blog! May I know what the vertical/y axis of the chart is measuring?? Is it accurate? May I also know where do you get these charts from??
Thank you!
Vertical axis gives the roperty Price Index with Q4 1998 as the base (index = 100).
Data is obtained from URA.
Based on my understanding and hands-on experience, data is accurate.
Best wishes.
Dear Smart Buyer,
What is the source of data for updated Property Price INdex please? I cant seem to find it on the URA website.
Thank You very much!
You should find it with the help of a search engine.
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The blogger here has been affectionately named by close allies as "Smart Buyer" but really, he's not smart. Smart Buyer just believes that being prudent is smart. That's the essence of the message of this blog and Smart Buyer hopes it'll benefit other property buyers.
Smart Buyer :)