Singapore's household debt during the first quarter was relatively high compared to other Asian countries at 77.2 percent of its GDP, revealed a report from Bank of America Merrill Lynch.
It then comes as no surprise that the government has implemented measures to ensure that Singaporean households do not over-borrow, and also cool the HDB resale market, the report added.
Buyers are being drawn to more affordable and smaller units following the government's latest property cooling measures and stricter loan rules, according to a report from DTZ.
During the second quarter, 2,571 buyers (38 percent) opted to buy homes below S$1 million, higher than the 1,835 buyers (31 percent) in the previous quarter. Purchases between S$1 million to S$1.5 million also increased to 33 percent or 2,265 units in Q2.
With stricter loan requirements set for private property, many buyers are now finding cheaper alternatives in the executive condominium (EC) market, media reports said. The shift is mainly due to the introduction of the Total Debt Servicing Ratio (TDSR) framework, which covers a borrower's total debt repayment including mortgages. Banks now need to ensure that borrowers' total monthly debt repayments do not exceed 60 percent of their gross monthly income.This buying trend became evident when two recent launches reportedly saw bullish sales.
The 495-unit Sea Horizon EC in Pasir Ris was three times oversubscribed
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