Monetary Authority of Singapore Annual Report 2012/2013
Anchor of Economy

MACROPRUDENTIAL POLICIES

Property Measures to Maintain a Stable and Sustainable Property Market

MAS introduced two rounds of property market measures in 2012 and early 2013, to foster long term stability in the property market. In October 2012, MAS restricted the tenure of loans granted by financial institutions for the purchase of residential properties. We imposed a cap of 35 years on the tenure of housing loans granted by financial institutions. In addition, loans exceeding 30 years would face significantly tighter loan-to-value (LTV) limits. For housing loans granted by financial institutions to non-individuals, the LTV limit was lowered from 50% to 40%.

In January 2013, MAS lowered the LTV limits for property purchases by individuals with one outstanding housing loan from 60% to 50%, and by individuals with two or more outstanding housing loans from 60% to 40%. Loans with longer tenure would face even tighter LTV limits. We also increased the minimum cash down payment requirement from 10% to 25% for property purchases by individuals with at least one outstanding housing loan. In addition, the LTV limit for housing loans to non-individuals was further lowered to 20%. To moderate the demand for HDB flats and instil greater financial prudence among buyers, MAS introduced a mortgage servicing ratio requirement of 30% on loans granted by financial institutions for the purchase of HDB flats.