Well, well... new mortgage rules = fuxored market?

[offshoreoildude]

Max 35 year loan to 65 years of age.
60% max.
Yeah I think the Govt just screwed the market.
Typicaly of the new chop and change PAP style - no consistency anymore = no stability.

[offshoreoildude]

Oh and applies to refinancing as well. Damn. property crash coming.

[nakatago]

[offshoreoildude]

This will push up the monthly loan quantum (so rent may go up) and the tightened rules about additional mortgages (cash now = 60%) will force the rental market up as investment will be severely curtailed (i.e. less properties for rent). This will also limit renters ability to enter the property market for purchare (all from Money in the ST - paraphrased).

[revhappy]

Thanks for the alert OSOD, but just like what the comment in the article says, this measure is like a tremor in comparison to the earth quake that ABSD brought.

[zzm9980]

60% loan max is only for those loan over 30 yrs, or where you'll be older than 65 at completion, correct?


edit: yes, here are the details:
http://www.mas.gov.sg/en/News-and-Publi ... rties.aspx

New rules on loan tenure

9 The new MAS rules impose an absolute limit of 35 years on the tenure of all loans for residential property. This will apply to loans to both individual and non-individual borrowers, as well as refinancing loans1, from 6 October 2012.2

10 In addition, MAS will lower the LTV ratio for new residential property loans to borrowers who are individuals, if:

the tenure exceeds 30 years; or
the loan period extends beyond the retirement age of 65 years.
For these loans, the LTV limit will be:

40% for a borrower with one or more outstanding residential property loans3; and
60% for a borrower with no outstanding residential property loan.

[zzm9980]

Thanks for the alert OSOD, but just like what the comment in the article says, this measure is like a tremor in comparison to the earth quake that ABSD brought.

Oh, one of the very few benefits of being an American in SG (Or Swiss, Icelandic, Norwegian, and whatever you call people from Liechtenstein)

[x9200]

60% loan max is only for those loan over 30 yrs, or where you'll be older than 65 at completion, correct?

Correct. So depending on MAS evaluation of the buying power of the market it may not be necessary such a bad thing. At least it looks like the property prices should drop a bit.

[offshoreoildude]

60% loan max is only for those loan over 30 yrs, or where you'll be older than 65 at completion, correct?

Correct. So depending on MAS evaluation of the buying power of the market it may not be necessary such a bad thing. At least it looks like the property prices should drop a bit.

Well, I'm disappointed but not overly concerned. I need to refinance in April 2014 though (and I originally finances until I was 75 or 79 I think - can't remember) - so it may actually push me into selling and leaving. I'm not convinced will drop property prices yet.... for that we usually need a recession of at least two years duration based on past experiences.

[zzm9980]

60% loan max is only for those loan over 30 yrs, or where you'll be older than 65 at completion, correct?

Correct. So depending on MAS evaluation of the buying power of the market it may not be necessary such a bad thing. At least it looks like the property prices should drop a bit.

IMO, this will kill the low end ($1.2mil SGD and under) condo market. I would imagine that market is dominated by those flipping their first HDB and looking to upgrade. I'd also put them in the mid30s-mid40s bracket, just slightly over the 65 age limit.

[offshoreoildude]

60% loan max is only for those loan over 30 yrs, or where you'll be older than 65 at completion, correct?

Correct. So depending on MAS evaluation of the buying power of the market it may not be necessary such a bad thing. At least it looks like the property prices should drop a bit.

IMO, this will kill the low end ($1.2mil SGD and under) condo market. I would imagine that market is dominated by those flipping their first HDB and looking to upgrade. I'd also put them in the mid30s-mid40s bracket, just slightly over the 65 age limit.

Amen to above. More importantly it will dry up the investor pool by stopping new entrants into the core of the landlord market. Rents are going to go up in the long term failing any other changes.

[x9200]

By kill you mean no buyers or different type of the buyers?

[zzm9980]

By kill you mean no buyers or different type of the buyers?

I have no stats, just my assumptions, and those are that the dominate market for that range of condos (as described above) will be priced out of the market. All of the new developments in Ulu ulu (Pungol, Choa chu kang, etc) will be hit the hardest, and we'll see prices really fall there. The other market hit will be the uncles buying their third and forth properties just to rent as income. (This from an uncle they quoted in the paper who said just this). That will also lower property prices, but as OSOD said, rents will raise to cover the mortgage for those still kiasu enough to buy and take the short term mortgage.

All a semi-educated guess, of course.

[revhappy]

This is OT, but Punggol is not anywhere as Ulu as CCK. Both Punggol and Sengkang are hot favorites among Indian expats and others. East is the most happening suburb now

[zzm9980]

This is OT, but Punggol is not anywhere as Ulu as CCK. Both Punggol and Sengkang are hot favorites among Indian expats and others. East is the most happening suburb now

Well then, given MOM's actions towards Indian expats I double-down on my theory. They're also a dying breed.