PRIVATE HOME PRICES REBOUND 4% IN 2005: Private home prices have risen by 3.9% in 2005, as compared to 0.9% in 2004. Prices have now gone up by 5.2% since they hit bottom in the 1Q of 2004 but they are still 34.8% below the 1996 peak. The private property market at present is increasingly bullish. In the last quarter of 2005 prices rose by 1.4%, the biggest quarterly rise in more than five years and the second subsequent quarters where the increase has breached the 1% level. The forecast for 2006 is for prices to climb by about 5%, with luxury homes jumping by about 20%. It looks like the worst is over for Singapore property market.

(The Straits Times 28 Jan 2006)

PROPERTY RULES EASED: The government has recently made 13 policy changes on property rules that brought cheers to many. They are:

1. Maximum housing loan for private and HDB residential properties increased from 80% to 90%.
2. Cash downpayment for private residential properties dropped from 10% to 5%. For HDB properties, the cash downpayment will be increased to 5% from 4% as of 1st Jan 2006.
3. CPF funds can be used to buy residential properties with shorter leases of 30-59 years. Withdrawal limits pegged to purchaser's age and the remaining lease on the property.
4. Foreigners can now buy non-condominium developments that are less than six floors. However, they still need approval to buy landed property.
5. Unrelated singles can uy private property with CPF funds. Singles, divorcees, widows and widowers can use CPF to jointly buy their first private property.
6. CPF members aged 55 and younger can use Ordinary Account balance after setting aside the Minimum Sum cash component. Those above 55 can use Ordinary Account balance less the Minimum Sum cash component shortfall.
7. Rules on use of CPF funds for 2nd and subsequent properties tightened. Savings in the Ordinary Account in excess of the Minimum Sum cash component can be used to buy only 2nd and subsequent properties effective 1st July 2006.
8. CPF members can no longer use CPF funds to buy non-residential properties.
9. CPF transfers to ensure sufficient funds for retirement. Any excess from Medisave Account will be transferred to the Special Account for CPF members aged 55 and younger and into the Retirement Account for those older than 55. Savings in the special and retirement accounts cannot be used for property purchases with effect from 1st July 2006.
10. Cash payment for participants in Staggered Downpayment Scheme reduced. For young couples wanted to buy new flats under construction, the two 10% payments made at the signing of the agreement and when taking possession have dropped to 5% each.
11. Foreign businessmen allowed to invest in private properties. Foreigners can be considered PR status if they invest S$2m in, among other things, businesses and private property. At least S$1m must be invested in a private-owned-occupied property.
12. Foreign companies will no longer be given exemption to buy residential land for development. A small number of companies given Qualifying Certificates (QC) under this exemption will be allowed to retain, without approval, any land bought before 5pm 19 July 2005.
13. Bankers' guarantee for QC reduced to 10%. This is to allow foreign companies to ride out the changes as well as to lower the cost of doing business in Singapore. The period allowed for completing developments has been extended to 6 years.

(The Straits Times 20 July 2005)