Singapore tightens property market restrictions to combat rising rates, demand According to Reuters

© Reuters. FILE PHOTO: A view of private residences in Singapore April 28, 2021. REUTERS / Edgar Su / File Photo

By Shubham Kalia

(Reuters) – Singapore has announced a package of measures for the property market, including tightening maximum lending limits on home loans in response to a rise in interest rates and new steps. to adjust demand.

The central bank of Singapore, the Ministry of National Development and the Housing & Development Commission said in a joint statement late Thursday, tightening the maximum loan limit would ensure “prudential borrowing”. ” and “avoid future difficulties”.

The measures will take effect from September 30.

Many central banks around the world have raised interest rates recently to combat inflation.

Singapore’s monthly inflation rate has remained high in recent months, and economists widely expect that the central bank will tighten policy at a review expected next month.

“Market interest rates have increased significantly. They are likely to rise further in the future, which will affect the cost of borrowing to buy a home,” authorities said in a statement on Thursday. “We encourage households to be cautious before taking on any new loans and be sure of their ability to repay before making long-term financial commitments.”

Prices of private and public housing apartments in Singapore, where real estate is seen as a safe investment, have increased as COVID-related construction delays create a shortage of new apartments.

Singapore said it would also introduce measures to control its property market, including a 15-month waiting period for existing and former private and residential property owners to purchase resale apartments. no subsidy from the country’s Housing Council.

The waiting period will not apply to citizens over the age of 55 who are moving from their own property to a four-room apartment or smaller resale unit from the Housing Council.

The city-state public housing system in Southeast Asia – which sells government-built apartments directly to residents under 99-year leases – has made more than 80% of Singaporeans homeownership, one of the highest rates in the world.

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