Banks Surely to Feel New Cooling Measures – DBS

Singapore Property | The new cooling measures in the private residential market are surely to soften up the Singaporean mortgage market in the long run as DBS Group Holdings predict.

Fortunately for DBS, the largest bank in the city-state, the extremely large number of homes purchased just before the changes took place should provide enough cushion and ease up the transition to the new dynamics.

The impact of these new curbs to the banks’ mortgage business should be softened up simply through the slash of unit prices made by developers in order to cope with the changes.

The changes can be felt significantly and the general public surely is taking action with large amounts of units being sold in the country. According to TODAYonline, the number of units purchased at Park Colonial, Riverfront Residences, and at Hougang, is at the region of 1000 just five hours before the midnight of July 5.

In personal contact with Bloomberg, DBS Singapore’s country head, Sim S Lim, said that “These people who bought 1,000 units will be looking for mortgage financing,” and that he is expecting “a slight ramp-up in mortgage financing requirements” in the course of the next one or two months.

Banks Surely to Feel New Cooling Measures – DBS

Although these new cooling measures are expected to deal a negative effect on the mortgage business of DBS, Lim still believes that the response of their clients, primarily first-time home buyers, should still soften the blow to some extent. This is because first-time buyers of private homes are still exempted from the ABSD or additional buyer’s stamp duty whereas their LTV or loan-to-value ratios are to experience a five percent reduction due to the changes.

Data from the last day of March 2018 showed that DBS still has $73.5 Billion in housing loans which means that they are accounted for 31 percent of the market share and 14 percent during the same period last year.

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