Tag Archives: TDSR

Govt unlikely to remove curbs soon

Posted on 3 Jun 2014 | Comments Off on Govt unlikely to remove curbs soon

Home prices are likely to fall further before the government rolls back the property cooling measures which were imposed since 2009, according to Standard Chartered in media reports.

“You would start to take away some of these measures if price growth reaches a certain level of equilibrium,” said the bank’s CEO for ASEAN, Lim Cheng Teck. However, he believes this is not the case yet.

Chesterton Singapore’s Managing Director Donald Han also holds a similar view: “It’s still too early to remove curbs. The government will monitor but their fingers won’t be pressing any buttons at this point in time.”

Although Lim declined to provide an estimate on how much correction is needed before the property curbs are withdrawn, CapitaLand forecasted in February that a five to 10 percent drop in home prices could goad the authorities to act.

Based on statistics, private home prices in Singapore dropped 1.3 percent in Q1 2014, its biggest decline since June 2009, following a 0.9 percent dip in the previous quarter.

Property curbs implemented in the past five years include the additional buyer’s stamp duty (ABSD), lower loan-to-value (LTV) ratios, seller’s stamp duty (SSD), higher levies on foreign buyers and the total debt servicing ratio (TDSR) framework.

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Cooling measures have been effective

Posted on 27 May 2014 | Comments Off on Cooling measures have been effective

The curbs imposed by the government from 2009 to 2013 have not only controlled the property bubble, they were also an important complement to monetary policy, said the Monetary Authority of Singapore (MAS) Managing Director Ravi Menon in media reports.

However, as they were introduced during a “highly unusual situation”, they will not be a permanent feature of policy and will only be implemented from time to time.

The eight rounds of property cooling measures include limiting the maximum loan tenure at 35 years, pegging the total debt servicing ratio (TDSR) at 60 percent, and capping the property-related exposure of banks at 35 percent of their overall lending.

For mortgages with tenures of less than 30 years, the loan-to-value (LTV) ratios were fixed at 80 percent for the first loan, 50 percent for the second and 40 percent for the third. For mortgages payable over 30 years, the LTV ratios were reduced to 60 percent, 30 percent and 20 percent respectively.

Interestingly, Singapore was one of the pioneers of such initiatives, introducing them as early 1996. Asian countries with similar existing measures are China, Korea, Malaysia and Hong Kong.

The city-state also introduced fiscal measures, such as buyer stamp duties of three to 18 percent and seller stamp duties of four to 16 percent, because the aforementioned macroprudential measures may not be enough to control loan growth and asset price increases.

“These are essentially transaction taxes that aim to curb the speculative flipping of properties,” added Menon.

Source : PropertyGuru

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