New cooling measures to impact banks’ mortgage business, says DBS

Christopher Chitty20 Jul 2018

Singapore CBD

Singapore’s mortgage market is expected to soften in the long term due to the new cooling measures in the private residential market, according to the city-state’s largest bank, DBS Group Holdings.

Nevertheless, the large number of homes purchased a few hours before the curbs took effect will give a temporary stimulus to their home lending business, including that of DBS.

More: New property curbs to erode market confidence: REDAS

To cope with the new curbs, developers are expected to slash their unit prices to entice home buyers, mitigating the impact of the new cooling measures on banks’ mortgage business.

Earlier this week, TODAYonline reported that around 1,000 units were snapped up at Park Colonial in Woodleigh, Riverfront Residences at Hougang and Stirling Residences in Queenstown in less than five hours before the clock struck midnight on Thursday night (5 July).

“These people who bought 1,000 units will be looking for mortgage financing,” DBS Singapore country head Sim S Lim told Bloomberg on Thursday (19 July).

He anticipates “a slight ramp-up in mortgage financing requirements” over the next one or two months due to the buying rush.

Although the new property cooling measures has a negative effect on the mortgage business of DBS, Lim believes that this will be alleviated by the nature of their clients, which comprise first-time home buyers and those purchasing HDB flats.

Notably, buyers of HDB flats are not affected by the new curbs. While first-time buyers of private homes remain exempted from the additional buyer’s stamp duty (ABSD), their loan-to-value (LTV) ratios have been reduced by five percentage points due to the new curbs.

As of 31 March 2018, DBS had $73.5 billion of housing loans in its books, accounting for 31 percent of the market share and up 14 percent from the same period in 2017.

Looking to buy a condo?: Check out our new launches.


Senior Content Producer, Christopher Chitty edited this story


You may also like these articles

Kentish Green up for en bloc sale for $230mil

(Source: GoogleMaps)Kentish Green, a 122-unit condominium in Oxford Road, has been put up for collective sale with a reserve price of $230 million, reported The Straits Times.Given the price, the owne

Continue Reading19 Jul 2018

Condo management fined for slow action on leaking pipe

(Source: GoogleMaps)Singapore’s Public Utilities Board (PUB) announced on Wednesday (18 July) that it has ordered the management of the 47-unit Nicon Gardens in 65K Choa Chu Kang Road to pay a $2,00

Continue Reading19 Jul 2018

Wheelock unit offers to take Wheelock Properties (Singapore) private

Image: Scotts Square Residences (Source: Christopher Chitty)Star Attraction, a wholly owned indirect subsidiary of Wheelock and Company, has launched a voluntary unconditional general offer to take ma

Continue Reading19 Jul 2018

HDB estates to become greener

The Housing and Development Board (HDB) said on Wednesday (18 July) that its newly launched residential projects will come with more green features now that it has completed its Biophilic Town Framewo

Continue Reading19 Jul 2018