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mas cooling measures 2013Effective 29 June 2013, MAS have introduced a Total Debt Servicing Ratio (TDSR) framework to ensure consistency in credit underwriting for property loans granted by financial institutions to individuals. The individual is inclusive of sole proprietorships and investment vehicles set up by an individual solely to purchase property.


The new framework will require all financial institutions to take into account borrowers’ other outstanding debt obligations when granting a mortgage. This framework is meant to strengthen financial prudence among borrowers.


The new framework will also refine rules to patch up “loopholes” relating to the application of existing Loan to Value (LTV) limits that were introduced on 12 Jan 2013 to limit the financing quantum that financial institutions may grant to borrowers. These refinements seek to ensure the effectiveness of the applicable LTV limits were enforced diligently to cool investment demand in the Singapore property market.


Under the new framework, financial institutions will be required to compute the TDSR or the percentage of total monthly debt obligations to gross monthly income on a consistent basis of not exceeding 60% in debt servicing ratio, applied with a medium term interest rate or the prevailing market interest rate, whichever is higher, to the property loan that the borrower is applying for when computing the TDSR. The standardise medium term interest rate under the new framework is set at 3.5% for residential housing loans and 4.5% for non–residential property loans.


Other measures include a standardise 30% haircut to all variable income (e.g bonus) and rental yield and applying haircuts to any eligible financial assets taken into consideration in assessing the borrower’s debt servicing ability when converting them into income streams for computing the debt servicing ratio (DSR).


Measures meant to patch up existing “loopholes” on applicable LTV limits include:

  • Having all borrowers named on a property loan to be mortgagors of the residential property.
  • Guarantors who are standing guarantee for home borrowers are to be brought in as co-borrowers instead.
  • For joint borrowers, the financial institutions would use the income-weighted average age of borrowers when applying the rules on loan tenure. The income-weighted average age will be based on the borrowers’ gross monthly income. Lower LTV limits apply to a loan granted for the purchase of a residential property, where the loan period extends beyond the retirement age of 65 years or the tenure exceeds 30 years.

The overall introductions of the new framework are structural in nature for the long term. These are aimed at encouraging prudent financial borrowing by home owners and to standardise and strengthen credit underwriting standards used by all financial institutions. Analysts expect the new cooling measures to be subdued while developers and property agents have reported seeing similar crowds at showflat over the weekend today and yesterday. Personally, we see this more of a windows 7.1 patch than a new launch of Windows 8.



Appendix 1 - Second Quarter 1/7/2013 URA Private Residential Property Price Index

Q2 Private Residential Property Price Index

Appendix 2 - Second Quarter 1/7/2013 URA Non-Landed Private Residential Property Price Index

Q2 Property Price Index of Non-Landed Private Residential Property

Appendix 3 - Second Quarter 1/7/2013 HDB Resale Price Index

HDB Resale price index 2013



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Singapore real estate propertiesLatest Release of Real Estate Statistics for Q1 2013

  • Prices of private residential properties increased 0.6% in Q1 2013, showing a moderation in the 1.8% price growth recorded in Q4 2012.
  • Price growth in the Outside Central Region (OCR) grew marginally by 1.4% as compared to 3.8% in the previous quarter Q4 2012.
  • Prices in the Core Central Region (CCR)  increased by 0.6% as compared to 0.7% in the previous quarter Q4 2012.
  • Rentals of private residential properties increased 0.8% in Q1 2013, which was marginally higher than the 0.7% increase sceen in Q4 2012.
  • Developers launched 5,546 uncompleted private residential units (excluding ECs) for sale in Q1 2013.
  • Developers sold 5,412 private residential units in 1st Quarter 2013, compared with the 4,353 units in Q4 2012.
  • Developers sold 725 EC units in Q1 2013, about 56% less than the 1,682 EC units sold in Q4 2012.
  • Volume of resale transactions decreased from 3,447 units in Q4 2012 to 1,871 units in Q1 2013.
  • Sub-sales transactions accounted for 4.5% of all sale transactions in Q1 2013, lower than the 7.7% recorded in Q4 2012.
  • Q1 2013 supply of uncompleted private residential units in the pipeline rose to 88,623 from earlier Q4 2012 86,475 units. Of this, 35,564 units remained unsold as at Q1 2013.
  • Additional supply of 11,938 EC units in the pipeline. Total cumulative EC units of 100,561 in the pipeline supply.
  • Based on the expected completion dates reported by developers, 18,400 units will be completed in 2013. This is the highest number recorded since 1997 of 14,600 completions.
  • Stock of completed private residential units rose by 2,204 units in Q1 2013.
  • Vacancy rate of completed private residential units dropped from 5.4% in Q4 2012 to 5.2% in Q1 2013.
  • Rentals for office space dropped marginally by 0.2% in Q1 2013.
  • Prices of office space increased by 2.1% in Q1 2013 as compared with the increase of 0.3% Q4 2012.
  • At the end of Q1 2013, a total supply of about 1.164 million sq m GFA of office space is expected in the supply pipeline.
  • Amount of occupied office space increased by 25,000 sq m in Q1 2013 as compared to 17,000 sq m increase in Q4 2012.
  • Rentals for shop space declined by 0.6% in Q1 2013. Supply of 639,000 sq m GFA of shop space projected in the supply pipeline.
  • Island-wide vacancy rate of shop space rose by 5.5% at the end of Q1 2013, from 5.2% at the end of Q4 2012.
  • Prices of multiple-user factory space increased by 2.9% in Q1 2013 as compared to the decline of 2.7% in Q4 2012.
  • Amount of occupied factory space increased by 83,000 sq m in Q1 2013, lower than the increase of 229,000 sq m in Q4 2012.
  • Vacancy rate of factory space rose to 7% in Q1 2013 from 6.9% in Q4 2012.


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