Despite having 7 rounds of property financing curbs by the Govt, property prices for both HDB resale flats as well as private properties continue to rise.
In the latest HDB flash estimate of the HDB Resale Price Index (RPI), resale prices were seen to continue to rise, although moderately, by 0.5% in the second quarter of 2013 over the first quarter.
The RPI for the second quarter 2013 is 206.5. In the first quarter 2013, the RPI was 205.5
HDB said it will release the RPI for the full quarter (Q2) later on 26 Jul.
The private residential property prices also continue to rise by 0.8% quarter-on-quarter in the second quarter of 2013 over the first. This is based on the flash estimate of the price index for private residential property released by the Urban Redevelopment Authority (URA).
The private residential property index rose 1.7 points from 213.2 in 1st quarter 2013 to 214.9 in 2nd quarter.
URA will release the full figures for 2nd quarter by the end of the Jul.
Meanwhile, MAS introduced a fresh round of loan curb on 28 Jun last week. It announced that under the new Total Debt Servicing Ratio (TDSR) framework, financial institutions will now need to consider a person’s total debt obligations, including other mortgages and loans for cars, before granting a new home loan. Banks will not be able to approve a loan if the monthly repayments of a home buyer’s total debt obligations exceed 60% of his gross monthly income.
MAS stated that the rules also apply to borrowers looking to refinance.
Other rules include the naming of borrowers on a mortgage as the owners of the property, and changes to loan-to-valuation rules to prevent borrowers from getting round tougher limits for second and subsequent housing loans.
Minister for National Development Khaw Boon Wan said on Sunday (30 Jun) that the tougher rules on home loan financing are expected to be permanent and are a “structural measure” to ensure a more stable property market.
“So it’s not really a cooling measure as such, but it’s a measure which will be quite permanent,” said Mr Khaw at a community event. “The current low interest rates are not sustainable, and we worry that people buy beyond their means.”
TR Emeritus
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