HDB loan limits tightened in latest cooling measure to curb high-end resale market

The Singapore government has introduced new property cooling measures aimed at curbing excessive borrowing and stabilizing the HDB resale market.

Announced by National Development Minister Desmond Lee, the key change is a reduction in the loan-to-value (LTV) limit for HDB housing loans from 80% to 75%, effective 20 August. This adjustment targets the top 10% of borrowers who often purchase larger, higher-priced flats, which significantly impact overall market prices.

Minister Lee emphasized that this move is designed to temper demand at the higher end of the resale market, where prices have been climbing despite previous cooling measures.

The change is part of a broader strategy to prevent a market bubble, encourage more cautious borrowing, and address concerns about housing affordability.

To support first-time buyers, the government is also increasing the Enhanced CPF Housing Grant, with families now eligible for up to S$120,000, and singles up to S$60,000.

However, property expert Ku Swee Yong criticized the approach, arguing that increasing grants could exacerbate housing affordability challenges by driving up resale prices and impacting retirement adequacy. He suggested that a better strategy would be to lower BTO flat prices rather than relying on grants to address affordability issues.

Read more: gutzyasia.com/Ghvb
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