Singapore home prices increased at the slowest pace in six quarters after the government introduced new loan measures to cool prices in Asia’s second-most expensive housing market.
The island-state’s private residential property price index rose 0.4% to a record 216.2 points in the three months ended Sept. 30, after it climbed 1% in the second quarter, according to preliminary figures released by the Urban Redevelopment Authority today. That’s the smallest gain since the first quarter of 2012, when the index dropped 0.1%.
Record home prices amid low interest rates raised concerns of a housing bubble and prompted the government to widen a campaign that started in 2009 to curb speculation in the property market. Singapore unveiled new rules in June governing how financial institutions grant property loans to individuals, in addition to previous curbs including new taxes and higher down-payments.
“The loan curbs are biting into the market,” said David Neubronner, national director at broker Jones Lang LaSalle Inc.’s residential project sales in Singapore. “The days of easy borrowing are over.”
The new loan framework requires that lenders take a borrower’s debt into consideration when granting mortgages, the Monetary Authority of Singapore said June 28. Home loans should not exceed a total debt-servicing ratio of 60% and those that do will be considered imprudent, it said.
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