| In January 2013, MAS revised the Mortgage Servicing Ratio (MSR) to be capped at 30% of a borrower’s gross monthly income for loans granted by financial institutions for the purchase of HDB flats.
In June 2013, MAS introduced the Total Debt Servicing Ratio (TDSR) framework. The new frame work serve to cap a borrower’s total repayment liability to be not more than 60% of his monthly gross income. Hence assuming if a borrower draws an income of $10,000 a month, his total monthly debt commitments/repayments should not exceed more than $6,000 a month.
Since the introduction of MSR and TDSR, home buyers have skewed towards buying executive condominiums. Recent data have shown an increase in sales transactions, with developers selling 1240 executive condo units in Q3 2013 as compared to 932 units in Q2 2013, representing a substantial increase of about ~33% over the previous quarter.
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