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SINGAPORE : National Development Minister Mah Bow Tan has announced changes to policies concerning Singapore's property market in three major areas.

These are: easing the cap on bank financing for residential properties, limits on the use of the CPF for property purchases, and restrictions on foreign ownership of land and properties.

On mortgage and financing policies, the financing limit for housing loans will be raised from 80 percent to 90 percent of the property value.

Mr Mah said the remaining 10 percent, which the buyer has to pay, would deter over-borrowing and minimise potential losses by banks as a result of borrower default.

HDB will also raise the loan limit for its flat buyers from 80 to 90 percent.

This takes immediate effect and will apply to all properties bought from Tuesday.

Also with immediate effect, the cash payment for private residential properties will be lowered from 10 percent to five percent.

From January next year, the cash requirement for HDB flats financed with bank loans will also be adjusted to five percent, down from ten percent.

Mr Mah said these changes would give consumers a wider choice of financing options when buying a property.

In a ministerial statement in Parliament on Tuesday, he stressed that the purpose of the measures was neither to boost nor depress the property market.

Rather, the review was aimed at improving structural rules to improve the functioning of the market and to better achieve broader economic and social objectives.

Mr Mah, however, cautioned that some of the measures introduced would have a positive effect on the market, while others might have a dampening effect.

And the net effect would depend on many factors beyond the measures announced.

On the use of money from the Central Provident Fund, Mr Mah said buyers could use their CPF to buy residential properties with shorter leases of between 30 and 60 years.

Restrictions on foreigners buying property are also being eased.

Mr Mah said the government would remove the restriction on foreigners owning property in apartment blocks of six floors and below, but will still require foreigners to seek approval for purchases of landed properties. - CNA/de/al