Government imposes new curbs on property buys through debt servicing framework

Stanchart reported that Singapore household leverage is 75% of GDP, doubling from 38% in 2000.

http://www.businesstimes.com.sg/premium/...s-20130703

Does Government Expect Turbulence in Singapore Property?
http://www.tremeritus.com/2013/07/04/doe...-property/

(30-06-2013, 08:12 PM)Behappyalways Wrote: The MAS is expecting interest rates to go up significantly and fast....They are trying to minimise the negative effect when the day comes......how rising interest rates going to affect the economy, the property players, the average households, the banks, the stock market and etc.......

(28-06-2013, 09:14 PM)nsengkia Wrote: I think the more important modification is in the 3.5% interest on which the 60% is based. Also reading between the lines, the 60% is only a start and will be lowered gradually.
The other part of the announcement that imposes the rule where guarantors have to be co borrowers effectively closes the "buy second property under family member name" loop-hole. All in, noose appears to be tightening around those who borrow excessively.

So the tide is going to turn.
If so, what action must we take, or what to watch out so as not to be caught naked? I mean besides the housing loans part...
Those who invested heavily in properties and had 'over leveraged' had better take some action? It's going to be ugly for people who expect rental to help cover loans.

I remembered during a down-turn, a friend who had put up his property in the market for exactly 1 year, before somebody actually called to want to view his property. He did not want the buyer to feel that he is hard up to sell, so he purposely drag the date of viewing...

(04-07-2013, 09:24 PM)Behappyalways Wrote: Does Government Expect Turbulence in Singapore Property?
http://www.tremeritus.com/2013/07/04/doe...-property/

(30-06-2013, 08:12 PM)Behappyalways Wrote: The MAS is expecting interest rates to go up significantly and fast....They are trying to minimise the negative effect when the day comes......how rising interest rates going to affect the economy, the property players, the average households, the banks, the stock market and etc.......

(28-06-2013, 09:14 PM)nsengkia Wrote: I think the more important modification is in the 3.5% interest on which the 60% is based. Also reading between the lines, the 60% is only a start and will be lowered gradually.
The other part of the announcement that imposes the rule where guarantors have to be co borrowers effectively closes the "buy second property under family member name" loop-hole. All in, noose appears to be tightening around those who borrow excessively.

If borrowers 'credit enhanced' the housing loans with guarantors, younger person, just pay down loan aggressively over the next year.

If ltv less than 50%, TDSR rules don't apply.

Said before, able to sell a property within a week is abnormal. Historically, real property are illiquid assets that takes 3-4 months to sell.

A relevant MAS report on the topic...

Rising household debt worries Singapore central bank

SINGAPORE — The Monetary Authority of Singapore (MAS) has said that rising household debt in the city state is worrying, and that it is “important to act now to limit build-up of leverage”.

MAS managing director Ravi Menon said that 5 to 10 per cent “have probably over-leveraged on their property purchases” — for example, they have total debt service payments at more than 60 per cent of their income.

http://www.todayonline.com/business/risi...ntral-bank