Cash-rich private property downgraders, en bloc sellers targeted in new property curbs

by Albert02

Cash-rich private property downgraders, en bloc sellers targeted in new property curbs

Cash-rich private property downgraders, en bloc sellers targeted in new property curbs. Only nine months after property controls were put in place to limit private residential prices from exceeding fundamentals, a new round of property regulations targeted the public housing market, which had been largely spared in the previous round.

This happens as hot money from private property downgraders flows into the public housing market, causing a 12.7% increase in Housing Board resale prices in 2021 and another 5.3% increase in the first half of 2022. According to Mr Lam Chern Woon, head of research and consultation at Edmund Tie, the government is concerned about the burgeoning public resale market.

“The authorities are clearly concerned about the impact of growing resale HDB prices on the private property market as well as the BTO (Built-To-Order) sector, where prices are offered at a market discount,” he explained. With interest rates on the rise, additional lending limitations to encourage more sensible borrowing became unavoidable. The new medium-term interest rate floor for residential real estate loans is 4%, while it is 5% for non-residential real estate loans.

Apart from immediately cooling the HDB resale market, Colliers’ head of research Ms Catherine He believes that Friday’s measures may indirectly cool the private residential market, particularly the mass market sector supported by HDB upgraders.

Recent policy changes are projected to reduce housing demand and prices. To begin with, potential house buyers’ purchasing power has been curtailed by limiting the amount that buyers can gear up. For private financial institution property loans, the Total Debt Servicing Ratio (TDSR) and Mortgage Servicing Ratio (MSR) are computed using a 0.5 percentage point higher medium-term interest rate floor. Mortgage TDSR and MSR will now be calculated using a 4% annual interest rate floor, up from 3.50% before.

Click the image to read the full details of report.
Source:
https://www.straitstimes.com/business/property/cash-rich-private-property-downgraders-en-bloc-sellers-targeted-in-new-property-curbs


Discover Your Home Here

Come and Experience it Yourselves
=============================
One Bernam
Book ShowFlat Appointment
=============================

Proudly Developed by MCC and HaoYuan Realty

You may also like

error: Content is protected !!