Calibrated adjustment a forward-looking measure

Previously, the SSD was payable by those who sell a residential property within four years of purchase at rates of 4 per cent to 16 per cent of its value. The holding period has now been reduced to three years for any property bought from today.

And SSD rates have been lowered by four percentage points for each tier.

Borrowing has also been made easier for some asset-rich but cash-poor property owners who wish to monetise their property. Upcoming executive condo launches include Hundred Palms ECYio Chu Kang EC, Inz Residence EC, Anchorvale Lane EC,  while existing ones include The Terrace EC, Brownstone EC, The Vales EC, Parc Life EC , Sol Acres EC, The Visionaire EC, Bellewoods EC, Signature at Yishun EC, The Criterion EC and Northwave EC.

The 60 per cent TDSR framework no longer applies to those who want to take mortgage equity withdrawal loans with loan-to-value (LTV) ratios of 50 per cent and below.

LTV ratio refers to the ratio of home loan to property value.

These loans allow borrowers to use residential properties as collateral to get cash.

First introduced in 2013, the TDSR limits property loans by ensuring monthly repayments for all debts – mortgage, credit cards, car loans, personal loans, and so on – do not exceed 60 per cent of monthly income.

These “calibrated adjustments” were announced by the Ministry of National Development, Ministry of Finance and Monetary Authority of Singapore (MAS) in a joint statement yesterday.

They said the bulk of current property measures “remain necessary to promote a sustainable residential property market and financial prudence among households”.

Hence, there is no change to the additional buyer’s stamp duty (ABSD) and LTV limits.

The ABSD is levied on Singaporean owners of at least one residential property, and foreigners and permanent residents buying residential properties.

The LTV limits for housing loan quantum that a financial institution can offer stands at up to 80 per cent of property valuation, subject to TDSR and other factors such as loan tenure and number of mortgages owned.

Welcoming the adjustments, property developer City Developments said they were measured and prudent, in line with the Government’s focus on keeping the residential market stable.

“The revised SSD, in particular, will provide flexibility for property investment and is expected to inject increased activity into the residential property market,” its spokesman said.

Experts also welcomed the tweaks, which they said are unlikely to heat up the market because speculative buying of properties is now minimal.

Changes to the TDSR framework will affect only a small group of owners, mainly retirees, they added.

Propnex Realty chief executive Ismail Gafoor said: “It is positive news as most property buyers are taking a mid-to-long term view of their investment.

“Reducing the SSD to three years may not have significant impact on transaction volume as there are minimal speculative activities.”

Calling the SSD adjustment a “forward-looking” measure, ERA Realty key executive officer Eugene Lim said: “While it may change slightly how investors and owners look at the timeline of holding their properties, we do not expect this tweak to push up property prices because there is abundant supply in the residential market, and the demand-cooling ABSD rates and LTV limits remain unchanged.

“Developers and sellers are expected to remain realistic when pricing units for sale.”

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