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MAS imposes 35 year limit on the tenure of all loans for residential property

Posted by temasektimes on October 5, 2012

In a desperate move to cooling the red hot property market, the Monetary Authority of Singapore (MAS) will restrict the tenure of loans granted by financial institutions for the purchase of residential properties, effective from 6 October.

The new rules impose an absolute limit of 35 years on the tenure of all loans for residential property. Currently, lenders are allowed to borrow up to 40 years for their housing loans.

In addition, loans exceeding 30 years’ tenure will face significantly tighter loan-to-value (LTV) limits.

For these loans, the LTV limit will be: 40% for a borrower with one or more outstanding residential property loans; and 60% for a borrower with no outstanding residential property loan.

The prices of Singapore properties have sky-rocketed in recent years due to the relentless influx of cash-rich foreigners, mostly from neighboring countries like China, India and Indonesia.

The move may have the unwanted effect of forcing buyers to switch from private properties to resale HDB flats, thereby contributing to further price increase.


21 Responses to “MAS imposes 35 year limit on the tenure of all loans for residential property”

  1. Populist said

    Cooling measures not hard enough lah. I would propose that Government should impose loan limit for second property to be reduced to 50% and zero financing for 3rd property onwards. If you have no money please don’t speculate on property.

    • wtf said

      Also must add escalating property tax if you have more than 1 property.

      Dont forget some people have lots of investment properties and some could have the power to hold on, so to ensure that they do not monopolize property , annual property tax must be increased exponentially for every additional property you have.

  2. 35 years loan pay (and work) until 65 years old

  3. Daniel said

    Too many rich foreigners throwing money around

  4. CheckIP said

    haha then the UOB 50 year loan how ? MAS making UOB look stupid ?

  5. Tan Yan Ren said

    the policies implemented by the ministries involved in national dev…and housing …are short sighted…because from day ONE they should (1.) NEVER have tempered with the private property market and should allow market forces to determine the mark. (2) never have screwed up the immigration policies like NOT allowing NEWLY IMPORTED citizens to buy HDB for at least X number of years …the obvious is the result …since they are paid so much …they should know..shit people running the Ministries involved…you call this talent …KEE CHUI!!!!

  6. seiya78 said

    if they wan to throw, throw to private mah……don get hdb involved

  7. Davi said

    Please don’t expect much from KBW, I have a strong feeling that he doesnt know what to do to cool the ppty market. Everything is “good buy” and no “big picture” for this mil paid minst.

  8. richard said

    HDB cannot be allow to put on market sale just sell buy to HDB Board same price or must live in HDB flat for 20 years term before it can put on sale.Gov can sell cheaper HDB for newly wed youngers to increase birth rate. HDB make less profit and improve birth rate,import less foreigner.

  9. rover2sg said

    This will make it easier for the foreigners to buy and then make money from the Singaporeans. The “hit” should be on investors and not on owner occupied properties buyers.

  10. Lim said

    What is Tharman doing!! Easy hot laundered cash money comes abroad to inflate our property bubble and they don’t need loans. So how does shortening loan tenure or lower LTV limits cool the market? You are not targeting the source of the bubble. Anyway when the sub-prime crisis hits Temasek banks from a recession which cause things to crash or the reverse if interest rates go up people default – the ineffectual policies will lead to DBS holding tons of bad loans and worthless properties. Perhaps they are waiting forl such a scenario to happen before they will act more decisively.

  11. Concerned said

    Over-rated ministers, please pay attention to this 24 hours a day. Singapore may end up in a worse case scenario – real estate bubble that will burst with plenty of people getting hurt and in big debts. With a recession heading our way and the coming property glut, the good times may be over by 2013-2014.

  12. P Koh said

    Is this rule going to help ease the inflationary cost of housing? The FTs or new citizens come into our country and can pay for their purchases with hard cash. This rule does not affect them a single bit. But on the other hand with new rules, is this going to hurt those who already have difficulty in catching up with the run-away prices of property.? Now without the leeway of a longer tenure of the loan and a cap on the amount of borrowings, how is this going to help locals purchase property to make it a home? It will drive them to seek solutions elsewhere – emmigration or buying property in Johore may just be the solution.

  13. Naivety said

    “The move may have the unwanted effect of forcing buyers to switch from private properties to resale HDB flats, thereby contributing to further price increase”.

    Isn’t this the main aim & objective of both MND & HDB so that they could enrich themselves further & the price of new & resale HDB flats will continue to escalate further until they cost $3 Million per 5-Rm HDB Unit…no brainer lah???!!!

  14. TT said

    These measures, as usual, are not aimed at foreign speculators. Most of them are cash rich and dun even bother about all these measures at all!! On the other side of the coin… Sporeans? They will be hit hard again cos now they have to fork out more cash to buy properties. Why are all the measures introduced making it worst for TBS? Sigh….

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