New measures won’t be expanded to non-property loans

Posted on 16 Jul 2013 | Comments Off on New measures won’t be expanded to non-property loans

The 60 percent cap on the Total Debt Servicing Ratio (TDSR) will not be expanded to include non-property loans anytime soon, said Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam, who is also Chairman of the Monetary Authority of Singapore (MAS).

“We don’t intend to, any time soon, extend the TDSR to other types of loans, but it’s really for the banks to factor it into their own internal assessments,” said Mr Tharman on the sidelines of a community event in Jurong yesterday.

“Supervision is more useful when it comes to the broad range of loans, not just more and more rules.”

Implemented at the end of last month for all property loans, the new ruling takes into account the borrower’s total debt obligation including mortgages as well as car, student and personal loans.

The latest loan-to-ratio cap is expected to be a long term measure.

“There’s no hard data on this but our rough assessment is that five to ten percent (of borrowers) are at risk of having over-leveraged, bearing in mind that interest rates are going to rise, and you can’t say for sure what the economy will be like, what unemployment will be like, a few years down the road,” he added.

Source – PropertyGuru – 16 Jul 2013

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Singapore among most expensive for foreign home buyers

Posted on 15 Jul 2013 | Comments Off on Singapore among most expensive for foreign home buyers

The purchase costs of new-build prime homes sold to foreign buyers in Singapore were ranked second-highest in the world, according to a Knight Frank study.

The Global Development Insights Q2 2013 report compares the fees and costs of buying new prime residential properties across global residential markets. The residential purchase costs include stamp duty, legal costs, as well as transfer and agency fees. The report also looks into annual costs of ownership for such homes, including wealth taxes, council or municipal taxes and property taxes.

In the global comparative ranking, Hong Kong and Singapore emerged as two markets with the highest purchase costs due to increased property taxes, after their respective governments introduced measures to cool the housing markets.

“Hong Kong is the most expensive location to buy a home, once all the associated costs have been factored in. Non-residents can expect to pay 25 percent on top of the purchase price when buying a US$3 million (S$3.78 million) home. The bulk of this consists of stamp duty costs and a property tax levied on foreign non-permanent residents,” the report said.

In Singapore, foreign buyers pay purchase costs of 19.3 percent. They are charged 18 percent in stamp duty which is the highest globally, following a hike in January to curb price growth – 15 percent additional buyer’s stamp duty plus the standard rate of around three percent.

Other markets with the top highest purchase costs are London (7.9 percent), Sydney (7.2 percent), and Bahamas (6.5 percent).

As for annual costs, Singapore landed in 10th spot while Hong Kong was number 14. New York, Bahamas, Miami, Barbados and Moscow were found to have the top five highest annual costs globally.

“Buyers need to be mindful of the taxes and charges they face when buying a property, especially given recent interventions by governments,” said Knight Frank.

Source – PropertyGuru – 15 Jul 2013

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