Martin Lee @ Sg
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Cooling Measures for HDB Resale Market

Yesterday, the government announced new cooling measures for the property market. This time round, the target is on the HDB resale market.

It’s about time such targeted HDB cooling measures are implemented as the HDB resale market prices had been on a relentless uptrend for the past few years.

The first cooling measure impacts new Permanent Residents (PRs).

Previously, a couple of two new PRs would be able to buy a HDB resale unit as soon as they receive their PR status. With the new regulation, they will need to wait three years before they can buy a resale HDB flat.

This change will help to reduce some of the immediate demand for HDB resale property.

The second and more significant cooling measure affects the mortgage servicing ratio and maximum loan duration for HDB units.

The maximum tenure for HDB housing loans will be reduced from thirty years to twenty-five years.

For loans granted by banks, the maximum tenure of new housing loans and re-financing for the purchase of HDB flats (including DBSS flats) will be reduced from thirty-five years to thirty years.

New loans with tenures exceeding twenty-five years and up to thirty years will be subject to tighter loan-to-value (LTV) limits of 60%. Previously, this tighter LTV limit applied to loan with durations of between thirty and thirty-five years.

The Mortgage Servicing Ratio (MSR) limit will also be reduced from 35% to 30% of the borrower’s gross monthly income.

By tightening the screws around the financing, buyers will be less able to pay a premium price for a HDB resale unit.

Besides the cooling measures, MND also announced the enhancement of some schemes for buyers of HDB units. These include:

  • Enhancement of the Special CPF Housing Grant
  • Step-Up CPF Housing Grant
  • Enhancement of the Multi-Generation Priority Scheme
  • Launch of Three-Generation (3Gen) Flats

For more details, you can read :

More Help, Stronger Support, Better Homes (HDB)

While these changes are good, it is getting increasing tougher and tougher for a layman to keep up with all the regulations and benefits. Looking at how fast the changes had been implemented, I dare to say that even some of the HDB officers will find it hard to remember them. After all, it takes time to build familiarity.

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