SINGAPORE – It has been almost two decades of the market slide and despite this, the country’s economic team’s decisiveness of not letting up on the restrictions remains unfazed. The Monetary Authority of Singapore passed new regulations to ease pressures on mortgage financing rules. Opposite to this, the Singaporean central bank made it clear that property curbs such as duty stamps will be here to stay according to an account by Bloomberg.
“This doesn’t represent anything at all,” as per MAS Managing Director Ravi Menon. “If you look for a prop up to the market, this is not going to help as it doesn’t apply to new loans. This is to improve financial prudence without creating new demand for housing loans. We won’t ease anytime soon.”
Menon was pertaining to the relaxing of restrictions on homeowners who wanted to refinance their existing mortgages by excusing them from the 60 percent cap of their total debt-servicing ratio (TDSR). This rule has been on-going since 2013 but it only covers households inhabited by their owners. Due to this difficulty, the TDSR went under heavy scrutiny after the concern was raised by many.
In 2013, Singapore imposed this debt-servicing restriction after a surge of foreign buyers, particularly those that came from mainland China. The city-state’s property curbs also limit the length of mortgages, tighten loan-to-value correlation and an increased 15 percent stamp duty for non-residents.
Since the implementation of this restriction, prices have gone down for 11 consecutive quarters. The government has repeatedly stated that these property curbs will remain amid the rising unemployment rate and slow economic growth.
In the same year, similar measures were introduced in Hong Kong. It includes a 15 percent tax on foreigners with taxes on quick resales and mortgage restrictions on top. In addition, Vancouver is the latest city to implement the new stamp duty on foreign sales of houses up to 20 percent. As a result, recent data showed that the tax caused a great impact on the market.
Read More: SG property news