ABSD 2021 Dec 16
Here's a summary on the cooling measures and impact.ABSD- Impact will not be huge if you are under SC/SPR 1st timers either by sell-buy for own stay, decoupling case or under trust- But Impact will be huge on foreigners with the increase from 20% to 30% ABSD & Owners buying under 2nd residential property- Risk on developers will increase significantly; since ABSD has increased from 25% to 35%, if they don’t sell every single unit within the 5 years time frame. So they will bid more prudently for lands in the coming years.- With this increased risk, developers will avoid larger land plots so they can meet the 5-year timeline, so this will put a slow on enbloc for larger land plots- Government will be increasing land supply for both private and public housing, so we will likely to see more GLS lands being released over the course of timeTDSR decreased from 60% to 55%- Impact is also not huge because the increased income required for this 5-point reduction is not massive- Please see below for a quick computation:Based on 30 years loan tenure, for $1M loan•60% TDSR: $7485 income required•55% TDSR: $8166 income required•Difference in income required: Only $681 for every $1M loanHDB loan dropping from 90% to 85%- No impact on HDB buyers taking bank loans as LTV remains at 75%- HDB buyers who qualify for HDB loans will now be required to fork out more cash or CPF- Please note that in order to qualify for the old 90% LTV for HDB loans, complete resale applications (both buyer and seller) must be submitted to HDB before 16 Dec 2021- Computation as such:Based on $500K HDB• 90% Loan: $50K Cash/CPF required• 85% Loan: $75K Cash/CPF required• For every $100K of purchase price, extra Cash/CPF is only $5,000With this quick analysis, the impact will not be as huge but more of a tighten rein on investors on 2nd property & also on developers from aggressively bidding for enbloc in the coming wave.