What URA didn’t tell you about the hidden Cooling Measure?

Cooling measure

The new URA 4 guideline changes on 17 October 2018 are not just a small change, but in fact, it’s like a hidden cooling measure! Which can cause a big change!

I will not go into details about the guideline changes here.

(For those who wish to read the details about the new guideline changes, click here.)

Instead, I will share more about what are the impacts on you.

I believe these will be more appealing to most of you, right?

In short, the government wants to counter developers from building shoebox units and control the traffic.

The Consequences?

The lesser number of sellable units in the project means the developers will make less profit as well.

How significant will be the difference? It reduces the number of units by 18% and 30%!

Certainly, this is a bad news for the developers, homeowners and also homebuyers!

You must be wondering why homeowners and homebuyers?

Why is it a Bad News to Homeowners?

The “Homeowners” here refers to those who are speculating or dreaming for successful en-bloc sales.

With the lower profit now to the developers, here is the end of collective sale fever for this cycle!

En bloc potential is not sure sign

But Why also Bad News to Homebuyers?

Literally, the formula used to restrict the maximum number of units allowed in developments outside CCR (core central region) is now gross floor area over 85sqm, instead of 70sqm previous.

In other words, the future private homes, their average size will be 21% larger than what’s in the market today (October 2018).

cooling measure effect

After I converted into the square foot, the average size now is 753sqft but soon to be 915sqft.

753sqft is the norm 2-Bedroom new condo size, whereas 915sqft is the norm 3-Bedroom Compact nowadays.

Future Condo will be More Expensive!

Meaning that the developers got to build all their unit mix larger by 21% or cut down the number of 1 and 2 bedrooms and replace them with 3 bedrooms.

Either way, the selling price in term of quantum is going to be much higher.

High chance is, you won’t be able to find anything new below $1million in the near future!

Because all the unit sizes will become bigger!

Generally, this makes more difficult for homebuyers who are looking for the affordable condo. The price gap for HDB upgraders to be widened again.

This new hidden “cooling measure” may not favourable to you if you wish to buy a new 1 or 2-Bedroom next year onwards.

However, this can be a double-edged sword too, especially for current private homeowners of the 1 and 2-Bedroom. Because people will start to look into resale when the new sale price is too high.

There are still some current new launches which do not affect by the new guideline changes.

Thus, turn yourself to be the owner before it is too late!

Tips For You:

If you are looking for 1 or 2 Bedroom unit, please buy now.

If you own 1 or 2 Bedroom unit below $700K or $850K respectively, you may hold until the effects kick in and sell at a higher price.

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