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HDB loan limits tightened in latest cooling measure to curb high-end resale market, says National Development Minister Desmond Lee

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The Singapore government has announced a new round of property cooling measures, focusing on reducing the maximum loan that home buyers can obtain from the Housing and Development Board (HDB). This move, aimed at promoting more prudent borrowing and stabilizing the resale market, was detailed by National Development Minister Desmond Lee on Tuesday.

Speaking to reporters after the announcement on Monday evening, Mr Lee explained that the tightening of the loan-to-value (LTV) limit for HDB housing loans is designed to temper demand at the higher end of the public housing resale market. Effective from 20 August, the LTV limit has been lowered from 80 per cent to 75 per cent, bringing it in line with mortgages offered by financial institutions.

“This will in turn have a knock-on effect of stabilising the rest of the resale market, but let’s watch and monitor the impact of these measures on the overall resale market,” Mr Lee said.

The adjustment in the LTV limit is not expected to significantly impact the majority of HDB loan applicants. According to Mr Lee, nearly 90 per cent of home buyers are already borrowing at LTV ratios of 75 per cent or less. However, the change targets the remaining 10 per cent who take up loans exceeding 75 per cent, often to purchase larger, higher-priced flats.

“That 10 per cent disproportionately buy the larger flat types, which drive up the overall market … They also disproportionately pay much higher prices,” the minister noted, highlighting that the median transaction prices for this group can be S$20,000 to S$60,000 higher than others, depending on the flat type.

The move, part of the fourth round of cooling measures since 2021, seeks to moderate prices in the higher-end of the HDB resale market, which has seen significant increases despite previous measures and a ramp-up in Build-To-Order (BTO) flat supply. In the first half of 2024 alone, resale prices rose by over 4 per cent, driven by robust demand across all buyer groups.

“This demand is supported by strong income growth over the last few years and the increase in property prices, which means more second-time home buyers are turning to the HDB resale market to meet some of their upgrading needs,” Mr Lee explained. He also pointed out that fewer flats reaching their minimum occupation period this year has contributed to a tightening in the resale supply.

The minister also addressed the market psychology, citing the impact of resale flats hitting record prices in the news. Although flats that cross the million-dollar mark represent only about 2 per cent of all resale transactions, they have a disproportionate influence on market perceptions.

“But the problem is that this has caused Singaporeans to be concerned about the affordability of resale flats as a whole,” he said. “Flat sellers who are reading such news raise their expectations about how much their flat could bring, while flat buyers become anxious to secure flats before prices get higher.”

To mitigate the risk of a market bubble, the government is focusing on dampening demand and encouraging more cautious borrowing, while also continuing to increase the supply of flats. “This is why we are moving now to dampen demand and encourage prudent borrowing, even as we continue to inject supply at a steady pace to meet demand,” Mr Lee stated.

In a related announcement, the government introduced enhanced financial support for first-time flat buyers, particularly those from lower-income groups. The Enhanced Central Provident Fund (CPF) Housing Grant will increase from S$80,000 to S$120,000 for families, and from S$40,000 to S$60,000 for singles purchasing their first flat.

“This is a significant increase from what we provided previously and will help first-time home buyers afford their first home,” Mr Lee said. He added that the grants are means-tested, with a tiered increase to ensure that lower-income buyers receive more substantial support without inadvertently driving up market demand.

Commenting on the recent measures, Ku Swee Yong, Key Executive Officer of International Property Advisor Pte Ltd and a property expert, wrote on his Telegram channel: “Giving more and more grants WORSENS, not lessens, the housing affordability challenges. It will exacerbate retirement adequacy issues down the road as the grants are paid through CPF.”

He added, “Over the last two decades, we have seen how additional grants (and the raising of income ceilings) have contributed to higher and higher HDB resale prices, forcing families to take on larger loans and pay more in interest expenses, thereby reducing CPF savings for retirement. The correct approach is to tighten eligibility and reduce financial burdens for young families by pricing BTO flats LOWER, instead of pricing BTOs high and providing more grants.”

The post HDB loan limits tightened in latest cooling measure to curb high-end resale market, says National Development Minister Desmond Lee appeared first on Gutzy Asia.

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Redditors question support for PAP over perceived arrogance and authoritarian attitude

Despite Senior Minister Lee Hsien Loong’s warning that slimmer electoral margins would limit the government’s political space “to do the right things”, many Redditors questioned their support for the ruling PAP, criticising its perceived arrogance. They argued that SM Lee’s remarks show the party has ‘lost its ways’ and acts as if it alone can determine what is right. Others noted that the PAP’s supermajority allows for the passage of unfavourable policies without adequate scrutiny.

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In a recent speech, Senior Minister Lee Hsien Loong warned that “if electoral margins get slimmer, the government will have less political space to do the right things.”

Mr Lee, who served as Prime Minister for 20 years, highlighted the risks associated with increasingly competitive politics.

“It will become harder to disregard short-term considerations in decision-making. The political dynamics will become very different,” he stated during his speech at the Annual Public Service Leadership Ceremony 2024 on 17 September.

“Singaporeans must understand the dangers this creates, and so must the public service,” SM Lee stressed.

SM Lee pointed out that Singapore faces formidable internal and external challenges in the years ahead, with rising expectations and demands from citizens.

As growth becomes harder to achieve and politics becomes more fiercely contested, he warned, “Things can go wrong for Singapore too.”

He urged vigilance in preparing for an uncertain future, noting, “As the world changes, and as the generations change, we must do our best to renew our system – to ensure that it continues to work well for us, even as things change.”

Critique of PAP’s Arrogance and Disconnect from Singaporeans

The People’s Action Party (PAP) experienced a notable decline in its vote share during the 2020 General Election, securing 61.24% of the votes and winning 83 out of 93 seats, a drop from 69.9% in 2015.

A significant loss was in Sengkang GRC, where the PAP team, led by former Minister Ng Chee Meng, was defeated by the Workers’ Party (WP).

In discussions on Reddit, some users questioned why they should support the ruling PAP, criticising the party’s perceived arrogance.

They pointed out that SM Lee’s recent remarks illustrate that the party has strayed from effectively serving Singaporeans and seems to believe it has the sole authority to decide what is right.

Others highlighted that the PAP’s super-majority in Parliament enables the passage of unfavourable policies without sufficient scrutiny.

One comment acknowledged that while many older Singaporeans remain loyal to the PAP due to its past achievements, younger generations feel the party has failed to deliver similar results.

There is significant frustration that essentials like housing and the cost of living have become less affordable compared to previous generations.

The comment emphasised the importance of the 2011 election results, which they believe compelled the PAP to reassess its policies, especially concerning foreign labor and job security.

He suggested that to retain voter support, the PAP must continue to ensure a good material standard of living.

“Then, I ask you, vote PAP for what? They deserve to lose a supermajority. Or else why would they continue to deliver the same promises they delivered to our parents? What else would get a bunch of clueless bureaucrats to recognise their problems?”

Emphasising Government Accountability to the Public

Another Redditor argued that it is the government’s responsibility to be accountable to the people.

He further challenged SM Lee’s assertion about having less political space to do the right things, questioning his authority to define what is “right” for Singapore.

The comment criticised initiatives like the Founder’s Memorial and the NS Square, suggesting they may serve to boost the egos of a few rather than benefit the broader population. The Redditor also questioned the justification for GST hikes amid rising living costs.

“Policies should always be enacted to the benefit of the people, and it should always be the people who decide what is the best course of action for our country. No one should decide that other than us.”

The comment called for an end to narratives that present the PAP as the only party capable of rescuing Singapore from crises, stating that the country has moved past the existential challenges of its founding era and that innovative ideas can come from beyond a single political party.

Another comment echoed this sentiment, noting that by stating this, SM Lee seemingly expects Singaporeans to accept the PAP’s assumption that they—and by extension, the government and public service—will generally do the “right things.”

“What is conveniently overlooked is that the point of having elections is to have us examine for ourselves if we accept that very premise, and vote accordingly.”

A comment further argued that simply losing a supermajority does not equate to a lack of political space for the government to make the right decisions.

The Redditor express frustration with SM Lee’s rhetoric, suggesting that he is manipulating public perception to justify arbitrary changes to the constitution.

Concerns Over PAP’s Supermajority in Parliament

Another comment pointed out that the PAP’s supermajority in Parliament enables the passage of questionable and controversial policies, bypassing robust debate and discussion.

The comment highlighted the contentious constitutional amendments made in late 2016, which reserved the elected presidency for candidates from a specific racial group if no president from that group had served in the previous five terms.

A comment highlighted the contrast: in the past, the PAP enjoyed a wide electoral margin because citizens believed they governed effectively. Now, the PAP claims that without a substantial electoral margin, they cannot govern well.

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Reforming Singapore’s defamation laws: Preventing legal weapons against free speech

Opinion: The tragic suicide of Geno Ong, linked to the financial stress from a defamation lawsuit, raises a critical issue: Singapore’s defamation laws need reform. These laws must not be weaponized to silence individuals.

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by Alexandar Chia

This week, we hear the tragic story of the suicide of Geno Ong, with Ong citing the financial stress from the defamation lawsuit against her by Raymond Ng and Iris Koh.

Regardless of who’s right and who’s wrong, this Koh/Ng vs Ong affair raises a wider question at play – the issue of Singapore’s defamation laws and how it needs to be tightened.

Why is this needed? This is because defamation suits cannot be weaponised the way they have been in Singapore law. It cannot be used to threaten people into “shutting up”.

Article 14(2)(a) of the Constitution may permit laws to be passed to restrict free speech in the area of defamation, but it does not remove the fact that Article 14(1)(a) is still law, and it permits freedom of speech.

As such, although Article 14(2)(a) allows restrictions to be placed on freedom of speech with regard to the issue of defamation, it must not be to the extent where Article 14(1)(a)’s rights and liberties are not curtailed completely or heavily infringed on.

Sadly, that is the case with regard to precedence in defamation suits.

Let’s have a look at the defamation suit then-PM Goh Chok Tong filed against Dr Chee Soon Juan after GE 2001 for questions Dr Chee asked publicly about a $17 billion loan made to Suharto.

If we look at point 12 of the above link, in the “lawyer’s letter” sent to Dr Chee, Goh’s case of himself being defamed centred on lines Dr Chee used in his question, such as “you can run but you can’t hide”, and “did he not tell you about the $17 billion loan”?

In the West, such lines of questioning are easily understood at worse as hyperbolically figurative expressions with the gist of the meaning behind such questioning on why the loan to Suharto was made.

Unfortunately, Singapore’s defamation laws saw Dr Chee’s actions of imputing ill motives on Goh, when in the West, it is expected of incumbents to take the kind of questions Dr Chee asked, and such questions asked of incumbent office holders are not uncommon.

And the law permits pretty flimsy reasons such as “withdrawal of allegations” to be used as a deciding factor if a statement is defamatory or not – this is as per points 66-69 of the judgement.

This is not to imply or impute ill intent on Singapore courts. Rather, it shows how defamation laws in Singapore needs to be tightened, to ensure that a possible future scenario where it is weaponised as a “shut-up tool”, occurs.

These are how I suggest it is to be done –

  1. The law has to make mandatory, that for a case to go into a full lawsuit, there has to be a 3-round exchange of talking points and two attempts at legal mediation.
  2. Summary judgment should be banned from defamation suits, unless if one party fails to adduce evidence or a defence.
  3. A statement is to be proven false, hence, defamatory, if there is strictly material along with circumstantial evidence showing that the statement is false. Apologies and related should not be used as main determinants, given how many of these statements are made in the heat of the moment, from the natural feelings of threat and intimidation from a defamation suit.
  4. A question should only be considered defamatory if it has been repeated, after material facts of evidence are produced showing, beyond reasonable doubt, that the message behind the question, is “not so”, and if there is a directly mentioned subject in the question. For example, if an Opposition MP, Mr A, was found to be poisoned with a banned substance, and I ask openly on how Mr A got access to that substance, given that its banned, I can’t be found to have “defamed the government” with the question as 1) the government was not mentioned directly and 2) if the government has not produced material evidence that they indeed had no role in the poisoning affair, if they were directly mentioned.
  5. Damages should be tiered, with these tiers coded into the Defamation Act – the highest quantum of damages (i.e. those of a six-figured nature) is only to be reserved if the subject of defamation lost any form of office, revenue or position, or directly quantifiable public standing, or was subjected to criminal action, because of the act of defamation. If none of such occur, the maximum amount of damages a plaintiff in a defamation can claim is a 4-figure amount capped at $2000. This will prevent rich and powerful figures from using defamation suits and 6-figure damages to intimidate their questioners and detractors.
  6. All defendants of defamation suit should be allowed full access to legal aid schemes.

Again, this piece does not suggest bad-faith malpractice by the courts in Singapore. Rather, it is to suggest how to tighten up defamation laws to avoid it being used as the silencing hatchet.

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