Singapore takes new steps to cool housing market

[Ringo33]

SINGAPORE: The Monetary Authority of Singapore (MAS) will restrict the tenure of loans granted by financial institutions for the purchase of residential properties, effective from 6 October.

MAS' move is part of the government's broader aim of avoiding a price bubble and fostering long-term stability in the property market.

The maximum tenure of all new residential property loans will be capped at 35 years.

In addition, loans exceeding 30 years' tenure will face significantly tighter loan-to-value (LTV) limits.

This will apply to both private properties and HDB flats.

The new rules aim to curb continued upward pressure on residential property prices, driven by low interest rates and rapid credit growth, said MAS.

Previous rounds of measures have had a moderating effect on residential property prices. There is also significant supply of housing that will come onto the market over the next two years.

However, prices in both the HDB resale market and private residential property have continued to rise in Q2 and Q3 of 2012.

- CNA/ir

[ikan bilis]

haha... mas chicken out liow...


but why residential properties only....

[Ringo33]

haha... mas chicken out liow...


but why residential properties only....

If I read correctly, this only applies to new property purchase, so for existing property, it should not affect your refinancing cost. Also LTV is very subjective as valuer can always increase the valuation to beat the LTV limit.

will be interesting to know what will be the LTV to take up 35 years mortgage.

[ikan bilis]

what i mean is why it does not cover all property types including residential, industrial, offices and shops ??... industrial and office are too speculative now....

[kane]

Suspected they were going to announce something this weekend given all the recent noise about rising prices. Just didn't want to be suay chui say it out. Haha.

[azeoprop]

Should have taken that uob 50 years loan

[Ringo33]

what i mean is why it does not cover all property types including residential, industrial, offices and shops ??... industrial and office are too speculative now....

because industry properties loan tenure is usually short and they do not want to create further cost burden to businesses.

[kane]

Should have taken that uob 50 years loan

You under 30years old meh? Haha.

[dtrax]

because industry properties loan tenure is usually short and they do not want to create further cost burden to businesses.

Right on! Plus commercial properties/market is much more complex than residential market.. any drastic change can have huge impact on our economy!!!

[auroraborealis]

http://www.channelnewsasia.com/stori...229731/1/.html

Ppl who just bought but yet sign LO affected le... Esp those with multiple loans

[carbuncle]

lucky I already locked in my loan one yr ago despite not being disbursed yet

[ikan bilis]

because industry properties loan tenure is usually short and they do not want to create further cost burden to businesses.

Right on! Plus commercial properties/market is much more complex than residential market.. any drastic change can have huge impact on our economy!!!

......it will push more speculations towards commercial/industrial...

for commercia/industrials (vs residential)
- No SSD
- No ABSD
- No 40% downpayment (LTV=60% max) for 2nd properties
- No restriction on loans
- smaller quantums (commercial/industrial starting from $300-400K, MM condos starting from $500-600K)

[Ringo33]

Suspected they were going to announce something this weekend given all the recent noise about rising prices. Just didn't want to be suay chui say it out. Haha.

I already anticipated it a few months back, and thats why I told my wife, we should buy instead of wait because I dont foresee prices will crash anytime soon.

[buttercarp]

http://www.channelnewsasia.com/stori...229731/1/.html

Ppl who just bought but yet sign LO affected le... Esp those with multiple loans

"Furthermore, MAS will lower the LTV ratio for new residential property loans to borrowers who are individuals, if the tenure exceeds 30 years or the loan period extends beyond the retirement age of 65 years.

For these loans, the LTV limit will be: 40% for a borrower with one or more outstanding residential property loans; and 60% for a borrower with no outstanding residential property loan."

OMG...... I feel scared for those who just bought but have not secured their loan! Why reduce the LTV for those with no outstanding residential property loan?

So if loan tenure does not exceed 30 years or extend beyond retirement, it should remain in status quo, right?

[Ringo33]

......it will push more speculations towards commercial/industrial...

for commercia/industrials (vs residential)
- No SSD
- No ABSD
- No 40% downpayment (LTV=60% max) for 2nd properties
- No restriction on loans
- smaller quantums (commercial/industrial starting from $300-400K, MM condos starting from $500-600K)

yes and now. The grey area in this policy is that LTV is subjective to valuer.

[snoopy]

"Furthermore, MAS will lower the LTV ratio for new residential property loans to borrowers who are individuals, if the tenure exceeds 30 years or the loan period extends beyond the retirement age of 65 years.

For these loans, the LTV limit will be: 40% for a borrower with one or more outstanding residential property loans; and 60% for a borrower with no outstanding residential property loan."

OMG...... I feel scared for those who just bought but have not secured their loan! Why reduce the LTV for those with no outstanding residential property loan?

I suspect this will affect alot of Sales performance for the upcoming New launches and those Sellers who are hoping to resale their units at a good price.

[carbuncle]

those that sold or missed the boat and sitting on side lines waiting .... can plan for longer wait now.

[ikan bilis]

i think resale/2nd-hand market for private residential property will be more dead from now on....

[auroraborealis]

Sigh... Just 1.5mnths after national day rally... I think buyers too complacent le... That's y they purposely whacked us by surprise

[dtrax]

New measure, mai gan cheong, take your time and slowly take ur pick. No need fight for same unit

[buttercarp]

But this will not affect those who turn up with a bag full of cash at the showroom to purchase.

[PN]

With this new CM, those still waiting on the sideline will jump in now & bite the bullet with shorter loan tenure for fear of more CM in the future.

Otherwise they will miss more boats.

[carbuncle]

refinancing also affected

[auroraborealis]

But my stance is firm... Whether mkt crash or not, I'm going to hug what I have (no selling)... If sell more n more difficult to buy back le; all the cash rich foreigners who have 100% cash will squeeze most Singaporeans out of the mkt

[buttercarp]

With this new CM, those still waiting on the sideline will jump in now & bite the bullet with shorter loan tenure for fear of more CM in the future.

Otherwise they will miss more boats.

Yup, especially those waiting at the sidelines with lots of ready cash.
So do you think there will be even better sales at the new launches?

[carbuncle]

this cm all thanks to eco and kovanregency

[buttercarp]

refinancing also affected

How do you think it will be affected?
I feel like I am suffocating!

[carbuncle]

more parents will be buying in their children names

[Ringo33]

With this new CM, those still waiting on the sideline will jump in now & bite the bullet with shorter loan tenure for fear of more CM in the future.

Otherwise they will miss more boats.

demand for smaller apartment should will jump due to the new LTV ratio

[buttercarp]

Wah lau...... u both sound like soothsayers!