Property analysts feel yesterday’s shock move by the Monetary Authority of Singapore (MAS) to relax the TDSR ruling is a step in the right direction.
In a statement, MAS said the changes will exempt some homeowners from the TDSR threshold and apply to those who purchased a property before the TDSR was implemented on 29 June 2013. They must also live in the home that is being refinanced and cannot own other properties or have outstanding home loans.
Responding, Mohamed Ismail, Chief Executive Officer of PropNex Realty, said: “The MAS widening of this exemption on the tougher mortgage rules is definitely good news for homeowners. The earlier measures had restricted homeowners in their re-financing plans, and this shows that the authorities are apt in listening to the feedback and tweaking the rules to best fit the market needs.”
Donald Han, Managing Director of Chesterton Singapore, noted: “The latest adjustment is a mere ‘tweak’ to TDSR rules to prevent unintended hardship amongst property owners caught in a refinancing bind. Failure to get favourable refinancing terms would mean these owners will have to sell their home. This may lead to forced sales cases at depressed prices.”
He added that the “relaxation” will have muted impact on the property market, but is possibly a marginal plus for bank refinancing volumes.
The TDSR threshold of 60 percent was introduced to encourage borrowers to right-size their loans and reduce their vulnerability to adverse economic conditions or changes in interest rates.
Romesh Navaratnarajah, Senior Editor at PropertyGuru, wrote this story. To contact him about this or other stories email romesh@propertyguru.com.sg
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