The Singapore government announced 3 property cooling measures on 30th Sep 2022 (see Joint MAS-MND-HDB Press release: Measures to promote sustainable conditions in the property market by ensuring prudent borrowing and moderating demand).
What are The 3 Property Cooling Measures on 30th Sep 2022 ?
Higher medium-term interest rate floor for bank and HDB housing loan eligibility
This is the stress test interest rate used to test if you can still afford the purchase of the property. It was 3.5% on 29th Sep 2022. It is now 4% on 30th Sep 2022.
With an income of $10,000, the max monthly loan is $5,500. With 3.5% interest rate, you can have a max loan of $1.224 million. Now your max loan is $1.152 million.
For HDB housing loan, HDB will introduce an interest rate floor of 3% for computing the eligible loan amount.
Lower Loan-to-Value limit for HDB housing loans (85% to 80%)
The LTV limit for HDB housing loans will be lowered by 5%-points from 85% to 80%. This means buyers must have 20% in cash or CPF and only loan 80% from HDB.
15 Months Wait for Private Property Owners to buy HDB flat
A surpisingly tough measure best explained hy this very good article on 15 months wait after selling your private property.
Private property owners, after selling their private property, must wait 15 months (somewhere in the forest or cave) before they can buy a HDB resale flat. 55 years old or older buying 4 room flat and below, are exempted.
Indeed, this will be an interesting time to see if these cooling measures will work. Previous measures have not really been very successful.
In fact, after this article was written, in April 2023, another new set of cooling measures were announced, including pretty steep increases in ABSD.
