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?

The Monetary Authority of Singapore (MAS), the Ministry of National Development (MND), and the Housing Board (HDB) announced a new round of cooling measures late Thursday (Sep 29), including stricter lending limitations for housing. In addition, they established a new 15-month waiting time for PPOs interested in HDB resale flats, which is widely expected to reduce demand in the downgrading segment. In the face of rising interest rates, the government is seeking to ensure prudent borrowing while also restraining demand. This is to avert future house maintenance issues, according to a joint announcement by MAS, MND, and HDB.

Here are some rapid thoughts from real estate analysts to the recent round of cooling measures:


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

According to the research, “the most recent round of cooling measures has had a more severe impact on the HDB resale market, particularly the larger 5-room and executive HDB flats, which may see reduced demand from private house downgraders or en bloc sellers, and pricing should be modified as a result.”

“As a result, reduced HDB resale prices may constrain upgraders’ ability and hence demand for private homes, which have recently reached S$2,000 per square foot (psf) outside the central region, closing the price gap with higher-end segments.”

“Some HDB sellers who chose not to sell high-priced HDB flats and instead used the funds to purchase investment private property would also be impacted.”

“En bloc sellers may have one fewer alternative lodging option, which could potentially drive up selling price expectations, dissuade developers even more in the aftermath of recently hiked land improvement taxes, and eventually limit private home supply in the medium to long term.”

ERA Realty Network chief executive Marcus Chu:

“The purpose of this bundle of cooling measures is to limit loan funding, which is the gasoline that drives the expansion of the property market.”

“However, for a variety of reasons, including the desire to hedge against excessive inflation, underlying real estate demand remains relatively healthy.”

“This wave of property limitations will push buyers to be more financially prudent,” which will boost the real estate market in the medium to long term by lowering financial risks associated with rising interest rates.

Click the image to read the full details of report.

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