Housing Board flat upgraders are likely to be the hardest hit by changes to the executive condominium (EC) housing scheme. As the Government tightens loan rules for EC buyers, buyers who are looking to sell their public flats to upgrade to an EC unit may have to moderate their expectations after monthly mortgage payments are now capped at 30% of their monthly salary.
This makes financing markedly tighter, in addition to July's total debt servicing ratio (TDSR) which capped total monthly debt payments at 60% of gross monthly income across the board. For instance, a household earning $10,000 can only secure a $600,000 loan from the bank now, as opposed to a larger $1.2 million loan previously for a household earning the same gross salary. This is a drastic drop of 50% in purchasing power and will severely dent an upgrader's ambitions.
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Example of an Executive Condominium -- Lush Acres.
The introduction of a resale levy applying to some EC buyers will also make EC units less attractive to HDB upgraders. This will in turn, push HDB upgraders to consider resale private properties or new launches that are rightly priced as private units have more leeway to secure a bigger loan compared to ECs.
HDB upgraders can also consider resale homes due to the lower price tags, especially after cash premiums fell below $10,000 for the first time in November 2013.
For more District Guides, you can head over to iProperty.com Singapore.
This makes financing markedly tighter, in addition to July's total debt servicing ratio (TDSR) which capped total monthly debt payments at 60% of gross monthly income across the board. For instance, a household earning $10,000 can only secure a $600,000 loan from the bank now, as opposed to a larger $1.2 million loan previously for a household earning the same gross salary. This is a drastic drop of 50% in purchasing power and will severely dent an upgrader's ambitions.
Example of an Executive Condominium -- Lush Acres.
The introduction of a resale levy applying to some EC buyers will also make EC units less attractive to HDB upgraders. This will in turn, push HDB upgraders to consider resale private properties or new launches that are rightly priced as private units have more leeway to secure a bigger loan compared to ECs.
HDB upgraders can also consider resale homes due to the lower price tags, especially after cash premiums fell below $10,000 for the first time in November 2013.
For more District Guides, you can head over to iProperty.com Singapore.