TDSR framework, implemented to moderate prices

Keshia Faculin7 Nov 2017

Artist’s impression of West Scape at Bukit Batok. (Photo: HDB)

The median price gap between private housing and HDB Build-to-Order (BTO) flats in the outside central region – where majority of the BTO flats were built over the past few years – has narrowed to 166 percent from 169 percent prior to the introduction of the Total Debt Servicing Ratio (TDSR) in June 2013.

The median price gap between private housing and HDB resale flats, on the other hand, widened to 130 percent from 106 percent previously, revealed the Ministry of National Development in a written answer to Parliament on Monday.

The ministry explained that the TDSR was implemented not only to safeguard financial prudence, but also to prevent individuals from over-leveraging whenever they acquire private homes with housing loans from financial institutions (FIs).

Those buying an HDB flat are also subject to a Mortgage Servicing Ratio (MSR) limit when they take an FI-originated or HDB housing loan.

“These measures have helped to moderate prices in both the private and public housing markets,” it said.

“However, as there are many different factors which could affect the prices of private and public housing, price comparisons between the two markets should be interpreted with care.”


This article was edited by Keshia Faculin.


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