The Government of Singapore is doing a lot to curb the rise of property prices on the island republic. Despite the increase in stamp duty measures that came into effect in recent years, prices continue to escalate. On 29 June 2013, the Monetary Authority Announces another round of measures to curb prices and this measures may just do the trick. Here is a summary of the measures:- • Total Debt Servicing Ratio (TDSR) shall be based on the aggregated total monthly debt obligations and aggregated gross monthly incomes of the joint borrowers. • The banks have to apply a specified medium term interest rate or the prevailing market interest rate, whichever is higher, to the property loan that the borrower is applying for when calculating the TDSR. For example, although the market interest rate is hovering around 1.5%, for calculation of TDSR, banks will use 3.5% (for residential loans) and 4.5% (for non-residential loans) to gauge repayment capacity. • Banks will only recognise 70% of all variable income (ie. bonuses) and rental income instead of 100% as practiced earlier. • TDSR shall not exceed 60% • No more standing as guarantor for a loan. He or she has to come in as a joint applicant. • Loan margin will be lower if applicant requests for tenure above 30 years. • For applicants with one existing loan, the margin for second loan will automatically be 50%. For applicants with two existing housing loans, the margin for third loan will be at 40% only. For purchases under company registration, the margin will be a mere 20%. The most alarming measure to date imposed in Singapore is the Additional Buyer’s Stamp Duty (ABSD) which was revised to 13%, upon execution of the Sales & Purchase Agreement! Well these measures certaintly will benefit the developers of Iskandar Malaysia and probably some spillover into Klang Valley. Happy Investing..
Posted on: Thu, 11 Jul 2013 09:45:22 +0000
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