The proportion of private housing loan applicants without any outstanding mortgages continued to rise in the first quarter of this year, according to latest figures from Credit Bureau (Singapore). This suggests that the January cooling package, with measures that discouraged multiple property ownership, is starting to bite, analysts say.

CBS data shows that of the 16,208 Singaporeans and permanent residents granted private home mortgages (including refinancing cases) in the first three months of 2013, 65 per cent did not have any outstanding home loans either for an HDB flat or private home. This figure is markedly higher than the 61 per cent for the whole of last year, which in turn was up from 56.4 per cent in 2011 and 53 per cent in 2010.

Most observers credit the government's property cooling measures for these trends. The latest package in January further lowered loan‐to‐value (LTV) limits for individuals with at least one outstanding home loan seeking subsequent home mortgages. Also, the move to extend additional buyer's stamp duty (ABSD) to the
second residential property purchase for Singaporeans and the first purchase for PRs plus the hike in ABSD rates have curbed property investment.

In turn, this has resulted in a higher proportion of first‐loan cases. CBRE executive director Li Hiaw Ho says the increase in first‐loan proportion in Q1 ties in with the strong developer sales, fuelled by launches of big projects in March. "These days, it's mostly first‐time buyers that are purchasing at launches since they are spared the LTV curbs and, in the case of Singaporeans, ABSD." He predicts that with a slowdown in big launches this quarter,the rise in the proportion of first‐loan cases may also abate. Knight Frank's Mr Tan agrees that big launches are typically for the mass market, where first‐timers prevail. Notwithstanding short‐term changes in the nature of supply, he reckons that the proportion of first‐loan cases will continue to
rise.

Source: AmFraser