New Singapore Property Market Cooling Measures

New Singapore property cooling measures have hit the shores of flooded property market as Ministry of National Development (MND) has announced 2 cooling measures in a press release today. Basically:

• HDB housing loan tenures are reduced from 30 years to 25 years
• The Mortgage Servicing Ratio (MSR) limit is reduced from 35% to 30% of the borrower's gross monthly income
• New Singapore Permanent Residents (PR) will have to wait 3 years after they become PR to buy a resale HDB flat.

MND says these first 2 measures are in line with those introduced by the Monetary Authority of Singapore (MAS) to encourage financial prudence among borrowers, which is especially important given that the current low interest rate environment is unlikely to be sustained.

According to The Straits Times, there were 51,000 Housing Board flats fully owned by permanent residents as of end June 2013, representing 6 per cent of all HDB flats. In 2013, 130 flats were sold by PRs within three years of their purchase, while 320 were sold within four years of purchase, and 490 within five years.