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Issue 249

Copyright © 2011-2016 www.propwise.sg. All Rights Reserved.

CONTENTS
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FROM THE

EDITOR

Understanding TDSR and How to

Welcome to the 249th edition of the
Singapore Property Weekly.

Position Yourself for a Property Loan
Hope you like it!

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Singapore Property News This Week

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Resale Property Transactions

Mr. Propwise

(February 15 – February 19)

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SINGAPORE PROPERTY WEEKLY Issue 249

Understanding TDSR and How to Position Yourself for
a Property Loan
By Eugene Huang (guest contributor)
Are you still sitting on the fence waiting for
property prices to drop before buying your
next property? It’s not wrong to be prudent
over such a major financial decision.
However, while you’re waiting for property
prices to drop, your chance of getting
approved for a property loan may also be
falling thanks to the TDSR (Total Debt
Servicing Ratio).
TDSR Explained
In 2013, the Monetary Authority of Singapore
(MAS) put in place a framework for
processing and granting property loans in a
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SINGAPORE PROPERTY WEEKLY Issue 249
way that strengthened and standardized the
credit underwriting process used by financial
institutions, while ensuring that borrowers
would only take a loan that was within their
capacity to repay. Thus, the Total Debt
Servicing Ratio or TDSR was born.
The TDSR is the percentage of your income
that can go into financing your new property,
after including all your existing debts such as
car loans, renovation loans, credit card loans,
student loans, personal loans and other
unsecured loans.
The TDSR capped the percentage of income
allowed for debt servicing to 60%. If your loan
repayment exceeds this limit, then you will not
be allowed to take the mortgage.
For instance, you make $5,000 every month.
Your TDSR is $5,000 X 60% = $3,000. This
means that if you need to pay $800 a month
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for your car loan, $900 for a home renovation
loan and $300 for credit cards, then you
would only be left with $1,000 to service your
mortgage. If your monthly loan repayment is
at $1,200, you will be denied the mortgage.
So if you didn’t have other loans, would you
have a better chance of getting approved for
a property loan? Not really.
Enter The Stress Test
Because mortgages are long-term loans, the
interest rates for property loans are subject to
interest rate spikes. Financial institutions use
a stress test to determine if you can handle
future interest spikes and still manage to
safely allocate a percentage of your income
to debt servicing.
With TDSR, financial institutions standardized
the stress test interest rate at 3.5% for home

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SINGAPORE PROPERTY WEEKLY Issue 249
loans and 4.5% for commercial property
loans. This means that property investors
must maintain a TDSR of 60% assuming
interest rates spike to 3.5% to 4.5%.
No More Age Roping
TDSR also considers the income-weighted
average age to consider the loan tenure. This
means that only income-earning individuals
will be considered in the calculation of income
weighted average age. Suppose you are 60
and you make $10,000 a month. If your wife
is 43 but not working, then the loan
repayment tenure will only be calculated
against your age. In this case, you can
obviously expect a shorter loan tenure
(perhaps five years) because the financial
institution will consider the years you will stay
employed and generate income. With a
shorter loan tenure, your loan repayment
amount will be bigger.
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Before, families would rope in younger
income-earning family members into the
income-weighted average age to increase the
eligibility for loans at a longer loan tenure.
With TDSR, this old tactic will no longer work.
Variable And Fixed Income Considered
TDSR also lowers the approved amount for
those with variable income, discounting the
variable income to just 70% of the actual
income. For instance, your variable income is
$4,000; financial institutions will only consider
$2,800 as your actual income and calculate
your eligibility for a loan based on this.
What’s Happening in the Property Market
Should Make You Wary
As you wait on the sidelines for property
prices to drop, you’re also putting a lid on
your chance to take a loan on account of
these cooling measures.
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SINGAPORE PROPERTY WEEKLY Issue 249
Market watchers foresee a moderate price
drop for the private residential properties this
year amidst a mounting supply of new homes
and with the government encouraging less
exuberance in borrowings. For property
investors, market watchers advise to expect a
weak leasing activity and the pain of an
impending rise in interest rates.
Positioning yourself for a larger loan
To be able to borrow from financial institutions
later, you have to position yourself for a
mortgage now.
You can do this by cutting down on other
borrowings to increase your eligibility for a
property loan. If you have variable income
such as rent, fees and commissions, make
sure to collect receipts. If you start positioning
yourself today, you can have a higher
property loan eligibility and hence make a
larger investment when the time is right.
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By guest contributor Eugene Huang, who is a
co-founder of Redbrick, an established
mortgage advisory that assists investors and
homeowners in sourcing for the best
financing option catered for their needs. They
partner with major local and international
financial institutions and deal with the banks
on the consumers’ behalf. Having come from
the local banking industry, Eugene Huang
possesses over a decade of proven track
record in providing financing solutions for real
estate owners. In addition, the team at
Redbrick has handled over 2,000 properties
and over SGD$2 billion in mortgages. More
than just a local mortgage advisory, they also
structure and source for both commercial and
residential mortgages in Asia-pacific including
Singapore, Malaysia, Thailand, Australia, as
well as Japan, USA and the UK.

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SINGAPORE PROPERTY WEEKLY Issue 249

Singapore Property This Week
Residential
Land parcel at Tanah Merah sold for
$419.38 million
A residential site at New Upper Changi Road,
near Tanah Merah MRT, was sold for $419.38
million or $761 psf ppr. This is higher than
what market experts had predicted previously.
Ong Teck Hui from JLL said that the top bid
for the site reflects the bidder’s confidence in
the market. He added that the pricing is
expected as another site along Siglap Road
was also sold for $858 psf ppr in January this
year. Ong said that market conditions are
expected to improve by 2017 and cooling

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measures might be eased by then, as such,
firms may be more willing to bid during the
tender. Nicholas Mak from SLP International
added that an absence of strong competing
projects by the time the development is ready
to launch in 2017 could have also contributed
to the high bid price. The site which has a 99year lease term, has a land area of 24,394 sq
m and an allowable gross plot ratio of 2.1.
The site is likely to be developed into 720
residential units and may consist of a
childcare centre.
(Source: Business Times)

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SINGAPORE PROPERTY WEEKLY Issue 249
Wisteria at Yishun to be launched at
average price of $1,030-1,050 psf

4,170 flats launched by HDB in Bukit
Batok, Sengkang and Bidadari

Located at Yishun Avenue 4, the Wisteria will
be launched soon. Half of the project’s 216
residential units will be put up for sale at the
launch at an average price of $1,030-1,050
psf. The preview started on 27 February and
sales is expected to begin on 12 March. 74%
of the 108 units launched will be priced below
$1 million each. Prices will range from
$469,600 for a one-bedroom apartment to
over $1.19 million for a four-bedder. The
Wisteria, which is expected to be completed
in 2018, will consist of a 12-storey mixed
development that will also include 83,361 sq
ft net lettable area of retail space. The site
was previously won for $185.09 million or
$629.24 psf of potential gross floor area.

Of the 18,000 BTO flats to be launched this
year, HDB has launched 4,170 flats in Bukit
Batok, Sengkang and Bidadari this February.
Despite flats in Bidadari commanding higher
prices, they have received an overwhelming
response, as predicted by market experts.
According to the Business Times, while there
are only 236 five-room and 3-generation flats
in Bidadari, at least 408 couples have applied
for those flats by 24 February. This translates
to an application rate of 1.7. Demand from
second-timers was strong at an application
rate of 13.8. On the other hand, the
application rates for flats in Sengkang
Anchorvale Plains was 0.6 to 0.8 while
application rates for flats in Bukit Batok West
Plains were 0.2 to 0.3 as of 24 February.

(Source: Business Times)

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SINGAPORE PROPERTY WEEKLY Issue 249
The Bidadari development consists of 1,994
units in total, and the Bukit Batok
development consist of 1,650 units while 921
BTO units were launched in Sengkang this
February.

predicts that there will be 8 to 12 bidders.
Desmond Sim from CBRE also predicts that
the site will be won between $380 and $470
psf ppr. Sim estimates that there will be 5 to 8
bidders.

(Source: Business Times)

(Source: Business Times)

Sembawang site launched for tender
Located at Jalan Kandis, a 0.7-ha residential
site was launched for sale in a tender. Market
experts predict that the site will generate
strong interest as it would not require a huge
capital outlay. The eventual project is
expected to be an affordable, entry level
condo for the suburban market. The site is
7,045.6 sq m and has a maximum
permissible gross floor area of 9,864 sq m. It
also has a lease tenure of 99 years. Ong Teck
Hui from JLL predicts that the top bid will be
around $400 and $470 psf ppr and he
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SINGAPORE PROPERTY WEEKLY Issue 249

Non-Landed Residential Resale Property Transactions for the Week of Feb 15 – Feb 19

Postal
District
1
1
1
2
3
4
5
5
7
8
9
9
9
10
10
10
10
10
11
11
12
12

Project Name
THE SAIL @ MARINA BAY
THE SAIL @ MARINA BAY
PEOPLE'S PARK COMPLEX
ICON
ALESSANDREA
REFLECTIONS AT KEPPEL BAY
HUNDRED TREES
PARK WEST
CONCOURSE SKYLINE
CITYLIGHTS
URBAN RESORT CONDOMINIUM
ASPEN HEIGHTS
MACKENZIE 88
BOULEVARD VUE
BOULEVARD VUE
BOULEVARD VUE
GOODWOOD RESIDENCE
GLENTREES
NEWTON SUITES
SOLEIL @ SINARAN
AIRSTREAM
ST FRANCIS COURT

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Area
(sqft)
883
861
1,119
936
1,098
1,055
786
1,249
829
1,841
6,857
1,582
807
4,478
4,478
4,478
2,605
1,991
797
1,475
624
1,270

Transacted
Price ($)
2,000,000
1,450,000
909,000
1,638,800
1,439,999
1,588,000
1,150,000
980,000
1,345,000
2,630,000
12,197,500
2,400,000
1,100,000
15,896,900
15,225,200
14,687,840
6,000,000
2,600,000
1,388,000
2,388,000
780,000
918,000

Price
Tenure
($ psf)
2,266
99
1,684
99
812
99
1,750
99
1,312
FH
1,505
99
1,464 956
785
99
1,623
99
1,429
99
1,779
FH
1,517 999
1,363
FH
3,550
FH
3,400
FH
3,280
FH
2,303
FH
1,306 999
1,743
FH
1,619
99
1,249
FH
723
99

Postal
District
13
14
15
15
15
15
15
15
15
15
16
18
18
18
19
19
19
20
20
20
21
21

Project Name
EURO-ASIA PARK
SUNFLOWER RESIDENCE
EAST VIEW
DE CENTURION
COSTA RHU
COSTA RHU
ST PATRICK'S RESIDENCES
COSTA RHU
LA MEYER
DUNMAN VIEW
COSTA DEL SOL
MY MANHATTAN
SAVANNAH CONDOPARK
ELIAS GREEN
A TREASURE TROVE
THE QUARTZ
JANSEN MANSIONS
GOLDENHILL PARK CONDOMINIUM
THE GARDENS AT BISHAN
GRANDEUR 8
THE BLOSSOMVALE
GARDENVISTA

Area
(sqft)
1,367
1,012
883
1,044
1,345
1,647
1,518
2,056
1,873
1,184
1,313
1,442
1,733
1,550
1,130
1,539
1,259
1,335
1,227
1,216
1,528
1,130

Transacted
Price ($)
1,450,000
805,000
1,180,000
1,388,000
1,700,000
2,070,000
1,900,000
2,340,000
1,950,000
1,200,000
1,510,000
1,620,000
1,190,000
900,000
1,146,000
1,490,000
808,000
1,610,000
1,180,000
1,135,000
1,900,000
1,365,000

Price
Tenure
($ psf)
1,061
FH
796
FH
1,337
FH
1,329
FH
1,263
99
1,257
99
1,252
FH
1,138
99
1,041
FH
1,013
99
1,150
99
1,123
99
687
99
581
99
1,014
99
968
99
642
999
1,206
FH
962
99
933
99
1,243 999
1,208
99

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SINGAPORE PROPERTY WEEKLY Issue 249

Postal
District
21
21
21
22
25
26
26
27
27
28
28

Project Name
HIGHGATE
THE CASCADIA
THE CASCADIA
PARC VISTA
WOODHAVEN
MEADOWS @ PEIRCE
THOMSON GROVE
THE ESTUARY
YISHUN EMERALD
H2O RESIDENCES
H2O RESIDENCES

Area
(sqft)
1,270
1,744
2,971
1,259
592
1,195
1,485
926
1,033
1,389
1,378

Transacted
Price ($)
1,225,000
1,570,000
2,350,000
1,050,000
690,000
1,438,000
1,535,000
870,000
725,000
1,375,000
1,350,000

Price
Tenure
($ psf)
964
FH
900
FH
791
FH
834
99
1,166
99
1,204
FH
1,033
FH
940
99
702
99
990
99
980
99

NOTE: This data only covers non-landed residential resale property
transactions with caveats lodged with the Singapore Land Authority.
Typically, caveats are lodged at least 2-3 weeks after a purchaser
signs an OTP, hence the lagged nature of the data.

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