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Subscribe to this list via RSS Blog posts tagged in TDSR

Easing of Some Property Cooling Measures - Sellers Duty and TDSR


The Government has just relaxed some of the cooling measures in place to reign in property prices in Singapore but ABSD or additonal buyer's stamp duty and the LTV or loan to valuation limits remain unchanged. Not so good news for buyers. For sellers, the SSD is cut from the 4-16% range depending on the holding period to 4-12%, a 4% cut for each holding year. The minimum holding period to escape SSD penalties was aslo reduced from 4 to 3 years.

The current TDSR restrictions state that your total loans cannot exceed a limit of 60% of your monthly gross income but now this limit will no longer apply hwen borrowers borrow against the values of their property to get cash provided the loan to value ratio is 50% or below.

Not what many investors are hoping for but its a start. To read more visit: Govt eases some property cooling measures report in the Straits Times.

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Posted by on in Property News

Dual Key Units

What are dual key units? In 1986, the HDB introduced units configured as a studio unit plus the main flat. The intention was to encourage multi-generational families to live under one roof. In 2009, Caspian Condo was the first to introduce the concept to the private residential market. Today, dual-key units can be found in both private and executive condos.

The Straits Times in this article "Developer 'still keen'on dual-key units" published on May 20, 2014 stated that the proportion of large residential projects offering dual key units has risen over recent years: 2011: 3.4%, 2013: 7.5%.

What do dual-key units offer? Basically a dual key layout has two subunits sharing the same foyer. The subunits can be self contained or consist of one full unit with an attached room. For couples, it offers a way to live next to your parents while maintaining some privacy. For others, one sub-unit can be used to generate rental income without loss of privacy.

According to the same article, dual-key units command a premium but this has dropped from 16% at its peak in 2012 to 12% max last year. The take-up rate has also dropped from 84% to 58%. Despite of these stats, dual-key units will appeal to young couples who would also like to be their parents or to investors who see such units as a way to generate another income or to help pay their property loans. Indeed, both units can be rented out to generate even more income. 

All potential buyers of any kind of property should first visit their banker and understand how much they can loan in the light of the TDSR cooling measure. This will help ground their expectations and narrow the range of properties or units that they can invest in. As previously mentioned in this blog: 1 in 3 buyers do not understand the TDSR and its going to save them a lot of time if they make an upfront assessment of the maximum amount they can loan.

Some properties launched or to be lauched with dual key units include:

The Crest @ Tanglin

Coco Palms

RiverTrees Residences

Sunnyvale Residences

Guillemard Suites

Highline Residences

Liv on Wilkie


Bentley Residences

The Tembusu

dual key








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One Third of Home Buyers Do Not Understand TDSR

The TDSR or Total Debt Servicing Ratio cooling measure has been highly effective in cooling down the market. According to this article by PropertyGuru -, a UOB survey has shown that one out of three home buyers do no understand TDSR. Borrowers know less about how TDSR affect them than they think. TDSR takes into account all personal debt including vehicle loans and credit card bills when determining how much a borrower can loan to invest in property.

Without this understanding, buyers may find that they don't qualify for a loan for the property they desire and have to consider downsizing their investment or even give up the idea altogether. They may aspire to own a property in a good location and growth potential only to find that its out of their financial reach. The best way to start the property search is for buyers to visit their banker and get a better idea of how much they can borrow for a new property based on their current debt situation and to consider their overall financial plan carefully.

property investments


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New Launches in the Coming Months Despite TDSR 

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Despite the slow down in the market, several new launches are being planned for the next 6 months. In Mar, the number of private dwelling sold fell to only 480 from 739 units in Feb and 572 units in Jan for a total of 1791 units for that quarter. This is the lowest since late 2009 as reported by Savills. Sales are down about 29% from last quarter and 57.9% year on year. The last cooling measure, the TDSR has shown its efficacy in cooling down the market as well as the buying sentiments and ability of many would be buers. But, it has been demonstrated by several projects that there are still buyers for projects with the right combination of design, location and prices. Examples of these are the Hillford (all 281 sold out), Riverbank in Sengkang (84% sold), RiverTrees Residences (73% sold) and The Panorama in Ang Mo Kio (48% sold). The recently launched Commonwealth Towers in Queenstown has also seen a lot if interest due to its location near the city and across the road from the Queenstown MRT. Many developers who bought their land at high prices are relunctant or unable to lower their prices down to what the market now expects. On a positive note, there is recent evidence that developers are now more cautious about their land bids and hopefully this will lead to a moderation of prices in the future with the caveat being that should the market turn around, developers will want to price their units to maximize profits even with land bought at lower prices. Developers who own freehold land from days of old are the ones with the most leverage in terms of timing and profits. Examples would be The Tembusu and Kallang Riverside.

Despite the slow down, several residential developments are in the horizon of the next half year:

  • Kallang Riiverside - Freehold mixed development along the Kallang River offering great views, river side living and proximity to the city and its amenities
  • Coco Palms - Leasehold condo in Pasir Ris Grove offering 1 bedroom units at less than $500k
  • The Rise @ Oxley near Dhoby Ghaut MRT Interchange.
  • Sunnyvale Residences in Teluk Kurau, near Kembangan MRT
  • The Crest by Wing Tai in Tanglin
  • The Bijou in Pasir Panjang
  • Condo at Yishun Central (to be announced)
  • Pollen and Bleu, Farrer Drive
  • New Futura, Leonie Hill Road,
  • Gramercy Park, Grange Road
  • Robin Residences, Robin Road
  • Marina One Residences in the city
  • South Beach Residences in the city
  • Highline Residences by Keppel Land
  • Marine Blue in Marine Parade
  • Others to be announced

Buyers will have multiple choices going forward but if they think it is the right time to jump in, they should be on the look-out for gems based on the benefits and price points and be prepared to act as shown by some of the successful launches last quarter. 

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Posted by on in Property News

MAS Makes It Easier to Refinance Properties Bought Before the Introduction of TDSR

On Feb 10, 2014, the Monetary Authority of Singapore (MAS) announced some exemptions that would please owners having difficulties refinancing older properties due to the TDSR measures. In their press release entitled, "MAS Broadens Exemption from TDSR Threshold for Refinancing of Owner-Occupied Residential Properties Purchased before the Implementation of TDSR Rules", it was announced that some exemptions will be allowed for owner occupied and investment properties.

Owner Occupied

In the first exemption. owners of properties with the Option to Purchase or OTP granted before June 29, 2013 (the date of the introduction of the TDSR measures) will be exempted from the 60% requirement when seeking to refinance their properties. This is provided they do not own any other property or have any other outstanding property loans.

The second exemption applies for owners of HDB or Executive Condominium units. They are exempted from MSR the property is owner occupied and are purchased before the respective MSR implementation dates.

The third exemption applies to loan tenures, where owners are allowed to keep the previous loan tenure when refinancing their properties.


Investment Properties

For investment properties, refinancing must be done before Jun 30, 2017. The owner can refinance above the 60% threshold but there are restrictions: a) OTP must be before June 29, 2013, b) the owner must commit to a debt reduction plan with the FI at the point of financing and 3) fulfil the FI credit assessment. These measures are to help investor rethink their financial commitments and readjust their debt and perhaps avoid having to sell off their properties.


So, for those stuck with not being able to refinance to take advantage of better loan packages because of the TDSR, these exemptions will be a welcomed adjustment.

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Big Drop in The Number of Private Properties Sold in December 2013 Vs November 2013

Aerial View - 800

Figure 1: Guillemard Residences

The URA released figures today that showed a plunge in both the number of properties sold (-80%) and the number of units launched in December 2013 when compared to November 2013. The cooling measures, especially the TDSR, are taking a real toll on property sales as is evident from these figures and more visibly from the low traffic at showflats in recent times. The TDSR has sidelined buyers who do not meet the 60% debt ratio, reduced the funds of others and generally made buyers more cautious. Worries about interest rates and the reduction in quantitative easing in the US may have an impact on sentiment. Finally, the decline in HDB resale prices may dampen the flow of upgraders from HDB to private property. All these factors appear to support a slow down in sales and prices in the near future.


Table 1: Number of Units Sold Per Month 

Month Total
December 2013 333
November 2013 1714


Of the 333 units sold in December, 74 units were ECs of which 24 were from Forestville EC in Woodlands and another 18 from Skypark Residences EC in Sembawang. The median psf for these two ECs were 736 and 791 respectively. The best selling private developments were Guillemard Residences (26 out of 146 units, 1494psf), The Glades (1477psf) and La Fiesta (1197 psf). These are located in the Guillemard, Tanah Merah and Sengkang areas, all in OCR or RCR. 

*This author notes that the range of psf values above overlap some freehold psfs which means that even in this climate, decent freehold deals can be found if one knows where to look. 

Singapore Business Review (see mentions estimates of a 5% drop in property prices in 2014 Vs. a small gain of 1.2% in 2013. The total number of units is also estimated to drop from 15015 in 2013 to 12500-14500 in 2014. The sizeable supply coming onstream as well as the general sentiment of the buyers of a price correction will also put more downward pressure on prices. It's becoming a buyers market but any property in a good location and priced attractively will still generate interest and sales.

Another article in SBR ( mentioned more data that expects a 5% drop in 2014 and 5-15% drop in prices in 2015. The 4th quarter of 2013 saw the first drop in prices in 7 quarters and prices are not 61% above the last trough in 2Q09.


Table 2: Number of Units Launched Per Month

Month Total
December 2013 118
November 2013 2172


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HDB COV prices have been dropping over recent months. COV was $15000 and $12000 in September and October respectively and is predicted by some to fall to $10000 by year's end. HDB prices have dropped 1.6% in October compared with a small 0.2% gain in September which correlates with the rise in the number of resale HDB units in October, a 26.5% increase over September.

Over in the private residential market, resale prices declined only 0.1% from September. The suburban and central areas fell the most at 1.4 and 0.9% respectively vs a slight gain of 0.4% in the city fringes. Mirroring the increase in sales in the HDB market, 13.6% more units (486 units) exchanged hands in the resale market in October compared with September. This however is quite a drop compared to Oct 2012 when 1,435 unts exchanged hands. 

Both HDB and private residential markets have seen cooling measures introduced. HDB has capped the mortgate servicing ratio at 30% of the borrower's gross monthly income and reduced the tenure of loans to 25 years for HDB loans and 30 yrs for bank loans. Also, permanent residents are now barred from purchasing flats during the first 3 years after receiving PR status. The large number of new flats in the pipeline may also dampen the HDB resale market. For private residential properties, the total debt servicing ratio (TDSR) limits borrowers total debt obligation to 60% of gross monthly income and there is the additional buyer's stamp duty or ABSD have worked to dampen the market. For more details on the above, visit

For new private properties, many buyers are also staying in the sidelines as they perceive a bear market coming and are waiting for prices to drop. Units that are still moving tend to be the units in the lower quantum range as demonstrated by the success of the InFlora recently. Property developers have started to respond to market conditions by reducing prices.


Credit TodayOnline

Tagged in: ABSD cov hdb Resale TDSR
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