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PropNex proposes to authorities a revision of cooling measures

PROPERTY brokerage PropNex has submitted proposals to the authorities asking for a recalibration of July's property cooling measures, chief executive Ismail Gafoor said at a media briefing. 

He also said that the recent increase of re-issued option-to-purchase (OTPs) at recent new launches was due to requests by buyers to delay exercising their purchases due to the burdens of additional buyer's stamp duty (ABSD).

This is currently at 12 per cent for Singaporeans purchasing their second property; though they can qualify for a refund later, subject to them selling their flat six months from completion of the construction of the newly built project. 

If they sell their HDB flat before exercising the OTP, PropNex said, it could cause inconvenience to them to have to find accommodation in the interim. 

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The idea that PropNex is putting forth is that HDB upgraders purchasing their first private home should get an ABSD remission, subject to undertaking to the HDB to dispose of their HDB flat within six months from exercising OTP or upon completion of the construction of these newly launched properties, or suffer penalties.

Mr Ismail also called for loan-to-value (LTV) ratios to be 80 per cent instead of the current 75 per cent for a first housing loan, and for ABSD for second property purchases to be lowered to 5 per cent or 7 per cent.

PropNex also thinks that the existing Total Debt Servicing Ratio (TDSR) framework is enough to prevent buyers from overleveraged, and that ABSD on second property purchase will cause buyers to invest in real estate overseas instead.