Singapore introduces new property cooling measures: maximum quantum loan limits are tightened, loan-to-value limit is lowered

INCREASE THE WAITING PERIOD

Authorities also noted that the HDB resale price index rose more than 5% at the end of the second quarter of 2022, since a previous set of cooling measures were introduced in December last year. .

Given the “clear upward momentum in HDB resale prices”, to moderate demand and ensure that resale apartments remain affordable, the government will impose a 15-month waiting period on owners of private homes before they cannot buy an unsubsidized HDB resale apartment. This will apply after they have sold their property.

The new rule will also apply to those who have sold their private property before submitting an application to purchase a resale apartment.

These owners were previously allowed to purchase an HDB resale apartment on the open market, provided they sold their private properties within six months of purchase.

This waiting period will not apply to people aged 55 and over who move from their private property to a four-room or smaller resale apartment, the agencies said.

The waiting period for private home owners who are first-time buyers and wish to apply for the Central Provident Fund (CPF) housing subsidy and the enhanced CPF housing subsidy for their resale apartment purchase also remains unchanged at 30 months.

“This is a temporary measure that will be reviewed in the future depending on general market conditions and housing demand,” they added.

“The government remains committed to keeping public housing inclusive, affordable and accessible to Singaporeans. We will continue to monitor the property market and adjust our policies to ensure they remain relevant.

“We urge households to exercise caution before taking on new borrowing and to ensure their ability to repay debt before making long-term financial commitments.”

In December, the government announced a package of measures aimed at cooling the private residential and HDB resale markets.

This included increasing the Additional Stamp Duty for Buyers (ABSD) rates, tightening the total debt service ratio threshold and lowering of the LTV limit for loans.

ABSD rates for Singapore citizens and permanent residents buying their first residential property remained unchanged at 0% and 5% respectively. However, it has been increased for those buying a second or third residential property and subsequent ones.

The government has also tightened the total debt service ratio 60% to 55% threshold, meaning new mortgages cannot cause borrowers’ total monthly repayments to exceed 55% of their monthly income.

It also previously reduced the LTV limit for HDB loans, from 90% to 85%.