By Esther Teo, Property reporter| Published on Nov 17, 2012

Home buyers who take up a loan that lasts more than 30 years or extends past their retirement age of 65 will now have to fork out much more in cash. For reference only, Not for Circulation Powered by Singapore Property Collections www.singaporepropertycollections.com

ww

News articles are archived for reference, study and educational purposes for our property investors. This does not constitute of a investment advise. Investors and buyers should always seek professional advice from valuers and surveyors.

w. sin

The sixth round of cooling measures introduced last month sought to restrict all home loans to more reasonable time frames, of up to 35 years.

ga

It is followed by District 18, which includes Pasir Ris, Tampines and Simei.

po

The area has the highest concentration of homes of at least 70 sq m in size sold for under $1.5 million in the past four months, Knight Frank said.

re

These buyers could look to District 19 - comprising Hougang, Sengkang and Punggol - to meet their housing needs.

pr op

For instance, a home buyer aged 35 with a monthly household income of $12,000 can now afford a residential property with a maximum value of $1.5 million to $1.6 million on a 30year loan period.

er

An older home buyer aged 40 years with a similar monthly household income can now afford a home that costs $1.3 million to $1.4 million. This takes into account a 25-year loan term under the new rules.

ty

Property consultancy Knight Frank said in a report that demand for lowerpriced, non-landed private homes is likely to be healthier as the measures This assumes a debt-servicing ratio - a restrict the maximum term of loans. buyer's total monthly debt payments It offered some examples to show the divided by net income - of 35 per cent, impact of the latest cooling measures which is the recommended position of affordability, the report noted. on affordability.

co

lle

ct

io

DEMAND for homes under $1.5 million is expected to increase thanks to recent cooling measures aimed at preventing buyers from over-extending themselves.

ns

.c

Cooling measures likely to boost sales of sub$1.5m homes

om

The firm expects overall prices to increase marginally by around 0.1 to 0.3 per cent in the last three months of the year. esthert@sph.com.sg

ww

For reference only, Not for Circulation Powered by Singapore Property Collections www.singaporepropertycollections.com

News articles are archived for reference, study and educational purposes for our property investors. This does not constitute of a investment advise. Investors and buyers should always seek professional advice from valuers and surveyors.

w. sin

ga

po

re

pr op

er

ty

co

lle

"Competition in the secondary market will set in if the economy cools and unemployment rate increases," it added.

ct

"Any potential lower demand coupled with ample upcoming supply of new homes will put downward pressure on residential property prices.

io

Investors who have already bought homes would also be monitoring the market changes before making their next move.

ns

Knight Frank added that overall demand for homes could moderate in the coming quarter as the pool of local investors and foreign buyers thins on the back of multiple rounds of cooling measures.

.c

om

Where previously a buyer may borrow up to 80 per cent of the property's value for his first mortgage, he can now do so for up to 60 per cent if he busts the 30year loan or 65-year-old age limit. Under a similar scenario, the borrowing ceiling shrinks to just 40 per cent for his second and subsequent mortgages.