On 15 December 2021, the Singapore government announced new property cooling measures for the private residential, and HDB resale market. This is in bid to control the rising property prices, which has been remaining strong despite Covid-19. Private housing prices increased 9 percent since the first quarter of 2020, and HDB resale flat prices have increased 15 percent. If not adjusted for, the prices of property could potentially exceed their true value, and eventually run into a destabilising correction. To control the prices, the package of measures include: Additional Buyer’s Stamp Duty (ABSD) rates, tightening of Total Debt Servicing Ratio (TDSR) threshold, and lowering of Loan-to-Value (LTV) limit for loans from the Housing and Development Board (HDB). These would mean that buyer’s would be required to have more liquid cash in order to make a property down payment.
The Additional Buyer’s Stamp Duty (ABSD), is an additional stamp duty for people looking to purchase their second property onwards. After 16 December, it will increase from 12 percent to 17 percent for purchase of your second property, and 15 percent to 25 percent for your third-property.
Secondly, the Total Debt Servicing Ratio (TDSR) threshold refers to the maximum loan amount, which is a percentage of the borrower’s monthly income.The adjusted value is 55%, lower than the previous 60%.
lastly, the Loan-to-Value (LTV) limit refers to the amount of financing you can obtain, which is calculated as a proportion of the property’s value.
The three above factors will affects the amount of cash or CPF Ordinary Account (OA) savings you will need to cough up for the down payment of your property.
At Avenue Home Singapore, we understand that the property market is very dynamic. We constantly keep up-to-date with trends and ensure our clients can still achieve their goals amidst the uncertainty. Ask us anything to find out more about the new property cooling measures!