Will new loan limits, 15-month wait period finally cool property demand?

by Albert02

Will new loan limits, 15-month wait period finally cool property demand?

Will new loan limits, 15-month wait period finally cool property demand?

LATE on Thursday (Sep 29), the Monetary Authority of Singapore (MAS), the Ministry of National Development (MND), and the Housing Board (HDB) announced a new round of cooling measures, including tighter lending limits for housing. They also instituted a new 15-month waiting time for private property owners (PPO) interested in HDB resale flats, which is widely predicted to dampen demand in the downgrading segment. The measure comes as the government seeks to ensure cautious borrowing and limit demand in the face of rising interest rates. This is to avert future problems with home servicing, according to a joint statement from MAS, MND, and HDB.

Here are some fast reactions from real estate analysts to the current round of cooling measures:

OVERALL EFFECT

CBRE head of research, South-east Asia, Tricia Song:

“The latest wave of cooling measures has a more severe impact on the HDB resale market, particularly the larger 5-room and executive HDB flats, which may experience decreased demand from private house downgraders or en bloc sellers, and prices should be tempered as a result.”

“Lower HDB resale prices, in turn, could dampen upgraders’ ability and therefore demand for private homes, which have recently surpassed S$2,000 per square foot (psf) in the outside central region, closing the price gap with higher-end segments.”

“Some HDB sellers who had decoupled from selling high-priced HDB flats and utilized the money to acquire investment private property would also be impacted.”

“En bloc sellers may have one less alternative lodging option, which could potentially drive up selling price expectations, dissuade developers more after the recently increased land improvement taxes, and ultimately reduce private home supply in the medium to long term.”

ERA Realty Network chief executive Marcus Chu:

“This set of cooling measures intends to restrict loan funding, which is the gasoline that drives the property market’s expansion.”

“However, the underlying demand for real estate remains quite strong for a variety of reasons, including the need to hedge against excessive inflation.”

“This wave of property limitations will urge buyers to be more financially prudent.” This would be beneficial to the property market in the medium to long term since it would reduce financial risks associated with rising interest rates.”

Click the image to read the full details of report:
Source: https://www.businesstimes.com.sg/real-estate/quick-takes-will-new-loan-limits-15-month-wait-period-finally-cool-property-demand

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