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SINGAPORE HOUSING PRICE FLUCTUATION IN YEAR 2010 TO 2012 167017531940500121221531952000 Figure SEQ Figure * ARABIC 1

SINGAPORE HOUSING PRICE FLUCTUATION IN YEAR 2010 TO 2012
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Figure SEQ Figure * ARABIC 1: Singapore Residential Property Price Index
From the figure above, clearly shown that the housing price index of Singapore in year 2010 until 2012 has risen consistently and kept constant at the end of year 2012.

Singapore’s housing prices have grown at the fastest pace since 2010, as the country’s real estate market is recovering after four years of decline. According to data from the City Renewal Agency, the index of private home price index rose 3.1% in three months ended in 2010 March 31 compared to the previous quarter. The index rose 0.8% in the previous quarter. Starting in June 2010, this is the largest increase every quarter.

Housing prices in Singapore have risen in the past three quarters, and construction contractors are actively bidding to land through cooling measures (from additional taxes to limited lending) as markets shrink. In February, after the collective sale of the apartment reaches the level considered by the central bank, the government raises the home purchase tax at a cost of over 1 million SKD ($ 764,000). CITATION mar18 l 17417 (marketsfinance, 2018)In the second quarter of 2011, Singapore’s private residential property price index rose 2% qoq, with quarterly prices increasing 2.2% in the first quarter of 2011, 2.7% in the fourth quarter of 2010, and 2.9% in the third quarter of 2010, 2010. In the second quarter is 5.3%. City Renewal Authority (URA). CITATION Glo11 l 17417 (Guide, 2011)However, the factors affected Singapore housing price index to increase in year 2010 to 2012 included supply of housing in market, growth rate of country and interest rates. CITATION ECO17 l 2052 (ECONOMICSHELP, 2017)
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Figure SEQ Figure * ARABIC 2: Foreign buyers in the private residential market
A very important factor affecting housing price index increased a lot in year 2010 was because of the “Supply” of property. For instances, shortages supply had pushed up prices and oversupply will cause prices to fall. The graph shown the foreign buyers in residential market or property in Singapore, it clearly show that the foreign investor started to increase in year 2010 to 2011. In a case that lot of foreign investor were bidding housing with local people thus it decreased the supply of houses. Therefore, the prices increased as well. Hence, housing price index increased in year 2010.
In order to fight against rising house prices, the Singapore government has begun increase housing supply by selling land and buildings more government housing. Seller’s stamp duty and additional buyer stamp duty (ABSD) are launched in 2010 and 2011 respectively as a temporary measure to reduce demand and speculation. Tax on sellers punish short-term speculators. Additional buyer tax 7-10% of Singaporeans had reduced the demand of local investors.
ABSD is very effective in curbing foreign overseas money and property bubbles. Overseas buyers need to pay a 15% additional tax on basic 3% tax when purchasing any residential property in Singapore. Permanent resident buying their first residential property requires an additional 5-10% when they buy the first or next property. CITATION Lia17 l 2052 (Liang, 2017)
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Figure SEQ Figure * ARABIC 3: Singapore Average Overnight Interest Rate
Low interest rates is one of the factor affected the housing price index roses in 2010 to 2012. Interest rates affected the cost of monthly mortgage payments. High interest rates over time will increase the cost of mortgage payments and will result in reduced demand for home purchases. However, high interest rates make rental more attractive than purchases. If a homeowner has a variable mortgage, interest rates will have a greater impact. While a lower interest rates will decrease cost of mortgage payments and cause higher demand for buying property. Therefore, people preferred buying than rental.
From the data graph above clearly shown that interest rates of Singapore in 2010-2012 had experienced the lowest interest rates in Singapore. This was then resulted in high consumption or purchased of property, thus increased in Singapore housing price index between year 2010 to 2012. CITATION TRA l 17417 (ECONOMICS, n.d.)

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Figure SEQ Figure * ARABIC 4: Singapore GDP Growth Rate
Another reason of housing price index had grown rapidly was because of economic growth. Housing requirements depended on income of people, when economic growth thus income increase, people can spend more of their homes. This will increase demand and raise prices. In fact, housing demand is often regarded as the elasticity of income (luxury). The increase in income leads to an increase in the percentage of housing expenses. Likewise, during the recession, falling income means people getting poor, and those who lose their jobs may be lagging behind their mortgages and eventually property confiscate by bank.

From the graph above, shown that the GDP growth rate of Singapore in 2010 was extremely high and started to decline at the end of year 2010 but still the growth rate value was high and moderate that people were able to afford for housing purchase. CITATION TRA l 17417 (ECONOMICS, n.d.)
Summary
In summary, Singapore housing price index had increased a lot in year 2010 due to many factors such as interest rates, economic growth, availability of mortgages and supply of housing. In year 2010 of Singapore, the main factors affected the housing price index were supply of housing which because of purchase from foreign buyers and thus resulted in housing price getting higher. Next is the lowest interest rate in Singapore thus higher purchasing in property and higher in housing price.
However, Singapore government had implemented some solving methods to restrain the property bubbles such as Additional Buyer’s Stamp Duty (ABSD), Sellers’ Stamp Duty (SSD), Loan-to-Value (LTV) Ratio.

Cooling measures implemented by Singapore government were introduction of SSD for residential property and land sold within one year of purchase and LTV lowered to 80% from 90% on all housing loans except HDB loans in 20 February 2010.
In 30 August 2010, holding period for imposition of SSD increased to three years from one, minimum cash payments raised to 10% from 5% for buyers with one or more outstanding housing loans and LTV lowered to 70% from 80% for second properties
In 14 January 2011, holding period for imposition of SSD increased to four years from three, SSD rates raised to 16%, 12%, 8% and 4% of consideration, LTV lowered to 60% from 70% for second property and LTV for non-individual residential purchasers capped at 50%.

In 8 December 2011, ABSD introduced for further cooling measures where foreigners and non-individuals pay 10%, PRs buying second and subsequent property pay 3%, Singaporeans buying third and subsequent property pay 3% and developers purchasing more than four residential units and following through on intention to develop residential properties for sale would be waived ABSD, to qualify, developers have to produce proof of development and sale within five years.

In 6 October 2012, mortgage tenures capped at a maximum of 35 years, for loans longer than 30 years or for loans that extend beyond retirement age of 65 years where LTV lowered to 60% for first mortgage and to 40% for second and subsequent mortgages and LTV for non-individuals lowered to 40%. CITATION SRX l 2052 (Property, 2018)
References
BIBLIOGRAPHY ECONOMICS, T. (n.d.). Singapore Average Overnight Interest Rate. Retrieved from TRADING ECONOMICS: https://tradingeconomics.com/singapore/interest-rate
ECONOMICSHELP. (2017, October 15). Factors that affect the housing market. Retrieved from ECONOMICSHELP: https://www.economicshelp.org/blog/377/housing/factors-that-affect-the-housing-market/
Guide, G. P. (2011, August 05). Singapore’s house price rises slowing, as government measures bite. Retrieved from Global Property Guide: https://www.globalpropertyguide.com/Asia/Singapore/Price-History-Archive/singapores-house-price-rises-slowing-as-government-measures-bite-1222
Liang, D. C. (2017). Health Check: Taking the temperature of Singapore’s residential property market. JLL, 4.

marketsfinance. (2018, April 2). PITTSBURGH. Retrieved from Singapore housing prices expanded with highest pace since 2010: https://financeandmarkets.com/singapore-housing-prices-expanded-highest-pace-since-2010/
Property, S. (2018). Singapore Property Market Cooling Measures. Retrieved from SRX Property: https://www.srx.com.sg/cooling-measures?gclid=EAIaIQobChMI-6ONt97Y3AIVBQYqCh3w3wTQEAAYASAAEgIXJfD_BwE