Cooling Measures Impact on Singapore Real Estate Market
Cooling Measures Impact on Singapore Real Estate Market
On 30 September 2022, the government announced new cooling measures to “cool” down the property market. Let me summarise it for you.
First, those private owners aged 55 years old and below, there’s a 15 months wait-out period before you can buy a HDB flat. However, those seniors aged 55 and above, you are able to purchase a 4 room or smaller HDB flat type to cash out money for your retirements.
Secondly, mortgage rates have been increasing for the past few months and we expect the interest rate to rise further. As a result, the cooling measures were announced to ensure prudent borrowing amid rising interest rates.
Number 1 – For those taking HDB Loan example HLE – your Loan to value ratio has dropped from 85% to 80%, this means that your downpayment now is at 20%. If you are taking a bank loan for your HDB purchase, it will remain at 75% LTV ratio, downpayment at 25%.
Number 2 – HDB will introduced an interest rate floor of 3% per annum to compute a borrower’s eligible HDB loan amount.
Number 3 – For those taking loan from banks be it for HDB or private properties, banks are now using 4% to compute your total debt servicing ratio as well as your mortgage servicing ratio
In short, with the same income that you have now, the amount you are able to loan is lesser.
But in every crisis there’s always an opportunity, I have done my research and I will be more than willing to share with you on what you can do moving forward.
Do contact me for a discussion. I really appreciate your support! See you next time.
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