Additional Measures to Ensure a Stable and SPM

  • Published Date: 14 Jan 2013

    The Government has announced on 11 January 2013 a comprehensive set of measures that aims to cool the private and public housing markets. These measures are calibrated to be tighter on property ownership for investment, as well as on foreign buyers. To discourage over-borrowing, financing conditions for housing have also been tightened. In addition, structural measures have been implemented to strengthen the policy intent of public housing and executive condominiums. 
     
    The following measures take effect on 12 January 2013: 
    1. Additional Buyer’s Stamp Duty (ABSD) rates will be:
      1. Raised between five and seven percentage points across the board.
      2. Imposed on Permanent Residents (PRs) purchasing their first residential property and on Singaporeans purchasing their second residential property. 
    2. Loan-to-Value limits on housing loans granted by financial institutions (regulated by MAS) will be tightened for individuals who already have at least one outstanding loan, as well as to non-individuals such as companies. 
    3. Besides tighter Loan-to-Value limits, the minimum cash down payment for individuals applying for a second or subsequent housing loan will also be raised from 10% to 25%.
     
    The following measures (with effect from 12 January 2013) are specific to public housing : 
    1. Tighter eligibility for loans to buy HDB flats:
      1. MAS will cap the Mortgage Servicing Ratio (MSR) for housing loans granted by financial institutions at 30% of a borrower’s gross monthly income. 
      2. iFor loans granted by HDB, the cap on the MSR will be lowered from 40% to 35%. 
    2. Singapore Permanent Residents (SPRs) who own a HDB flat will be disallowed from subletting their whole flat. 
    3. SPRs who own a HDB flat must sell their flat within six months of purchasing a private residential property in Singapore.
     
    An additional measure will take effect on 1 July 2013 to tighten the terms for granting HDB loans and the use of CPF funds for the purchase of HDB flats with remaining leases of less than 60 years.
     
    The other measures include measures specific to new Executive Condominium developments and for the Industrial Property Market. You may refer to the Press Release for more information. 
     
    We would appreciate it if you could disseminate the information to your salespersons. Thank you.