Amidst the heating Singapore market, MAS has released an immediate press release which will take immediate effect from tomorrow,
[block type=”download”]Read the official press release from MAS here[/block]
The Monetary Authority of Singapore (MAS) will restrict the tenure of loans granted by financial institutions for the purchase of residential properties. MAS’ move is part of the Government’s broader aim of avoiding a price bubble and fostering long term stability in the property market.
2 The maximum tenure of all new residential property loans will be capped at 35 years. In addition, loans exceeding 30 years tenure will face significantly tighter loan-to-value (LTV) limits. This will apply to both private properties and HDB flats. The new rules will take effect from 6 October 2012.
These measures are somewhat expected and mirrored what Hong Kong has done after QE3 was announced by the Feds. Traditionally tenures over 30 years are not too popular, and shouldn’t affect the current property prices. This is especially a good move for home buyers whom might overestimate their affordability as well as investors who tend to stretch the loan tenures in case any volatility will to happen in the market.