how will HDB prices be affected? please enlighten...
$8 CowBeh says BTO prices have been delinked from resale prices, which i really don't know how true is it. don't see a drastic difference in price. Anyway, it's a simple supply and demand matter, more people buy, price go up, nobody want to buy, price go down. Singapore bring in 2 million immigrants and hand out citizenships and PRs, price will go up. If interest rate goes up, there will be two plausible scenarios, one, the inherent demand is still so strong that it will prop up the market for awhile, or two, people are getting stuck with loans that have now become alot more expensive, confidence drops and the property market bubble will burst.
Thing is government wants to stabilise the housing market, but the measures so far, have not much effect. One cooling measure was the Additional Buyer Stamp Duty which hit speculators hard, and made many investors look for alternative modes of investment. But this largely affects the private property market, which has seen somewhat of a slowdown, and not HDB so I will not go into it. The majority of buyers are houseowners intending to stay at the house, which shows a clear demand for HDB flats that have not been met for quite a few years, due to large increase in working population. Maybe the then MND MBT was sleeping too often in parliament? It does show a remarkable lack of planning and foresight for our property market to be in this state. Anyway, we are now stuck in the midst of a bubble, and it cannot sustain forever, as the property market goes in a cyclical effect. The government objective is to prevent speculators from hotting up the market, building overconfidence in property that has value that what it is worth, and to encourage financial prudence (abit too late though) to prevent too many people jumping from HDBs and swimming at Bedok Reservoir, when push comes to shove and the shit hits the fan.
How will HDB prices be affected? The effect will likely be miniscule. Spending 60% of your income on all your loans is a large amount. Imagine you earn $5000, your maximum monthly loan cap is $3000. It means a huge sum can be loaned, especially in these days of record low interest rates, and the typical housing loan will be spread over 30 years. The most common loans are car and housing. With the recent car cooling measure already implemented, I do not forsee this to have much impact on those with both car and housing loans. It's highly possible MAS may lower it to 50% of total income if prices continue to go up. Anyway, like many recent policies, I feel that this policy has come too late to make a real impact, this kind of measure is long overdue, should have been implement in 2011. Two years later, and after many people bought their houses, then come out with this measure. Seriously, I feel those who bought over the past couple of years are overpaying, but oh well, willing buyer, willing seller.