TDSR hit Singapore buyers harder than foreigners

[SINGAPORE] The total debt servicing ratio (TDSR) framework seems to have had a bigger impact on private home purchases by Singaporeans than on foreign buyers.

Private home purchases by all categories of buyers took a hit in the quarter following the introduction of the TDSR in late-June, but foreigners posted the smallest percentage drop of 39.1 per cent - compared with declines of 51 per cent for Singaporean buyers and 44 per cent for PRs. This was not unexpected, as the TDSR framework (under which financial institutions are required to take a borrower's total debt servicing obligations into account when granting property loans) was targeted at Singaporeans rather than at foreigners.

In contrast, the initial rollout of the additional buyer's stamp duty (ABSD) back in December 2011 had a much bigger impact on foreign buyers. Then, the number of caveats they lodged for the purchase of private homes tanked 73.5 per cent quarter-on-quarter, according to a caveats analysis by DTZ.