Jul 4, 2013
The
latest mortgage rules introduced by the Monetary Authority of Singapore (MAS)
will significantly affect multiple property owners and the mid-tier private
housing segment in the Rest of Central Region (RCR), according to Knight Frank.
“Investors
who have existing property loans and have sought various flexible ways to
secure multi-property loans will now face greater limitations to obtain new
loans for their next property purchase,” it said.
For
instance, middle-income investors who have existing mortgages and other debt
like car loans will struggle to buy a new property because their Total Debt
Servicing Ratio (TDSR) could exceed the 60 percent limit.
Singaporeans
with an existing HDB loan who wish to buy a private home may also encounter
difficulties in getting additional loans.
“Individuals
who have a higher proportion of variable income out of their monthly gross
income would also face greater constraints to obtain higher loan quantum,”
Knight Frank noted.
Mid-tier
private housing in the RCR will also be impacted due to high prices and the
loan-to-value (LTV) requirement. This segment is also favored by investors who
usually have existing loans.
However,
genuine buyers who have no existing mortgage or other major debt will be able
to get their desired loan quantum. The impact of the curbs on the HDB resale
market will also be limited as this segment already requires a Mortgage
Servicing Ratio (MSR) of 30 and 35 percent for HDB and private loans
respectively.
On the other hand, the 60 percent cap on TDSR could boost demand for more affordable homes such as shoebox and mass-market units. It could also grow the appetite for properties in other ASEAN countries, given the strong Singapore dollar and their positive growth potential.
Info courtesy - PropertyGuru.com.sg
