Debated in Parliament on 11 Jan 2022.
Mr Chua Kheng Wee Louis asked the Prime Minister since 2013, what is the annual number and proportion of HDB and private property flat buyers who had a total debt servicing ratio of above 55%.
The Total Debt Servicing Ratio (TDSR) threshold was adjusted from 60% to 55% as part of the package of cooling measures which took effect on 16 December 2021 to promote a stable and sustainable property market. The intent of the tightened TDSR threshold is to help moderate demand, especially in the private property market and encourage financial prudence among home buyers. The TDSR framework only applies to loans granted by financial institutions (FIs), including those extended to HDB flat buyers.
The number and proportion of private housing and HDB flat buyers who had a TDSR of above 55% are shown in Table 1. Only 3% of HDB flat buyers taking up a mortgage loan from FIs in 2020 have TDSRs of above 55%. However, about two-fifths of those borrowing to purchase private property – which includes those doing so for investment purposes as well as owner-occupiers – have TDSRs of above 55%. The new TDSR threshold will nevertheless encourage a significant number of prospective private property buyers to right-size their intended purchases and mortgages and will enable them to better service their debt obligations particularly as interest rates rise in future.
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