BUYING a property in Singapore could well be considered the most “expensive” of purchases in the lifetime of most Singaporeans, especially with today’s high property prices. Whether the property is for one’s own use or for investment, it is a financial commitment that one has to maintain as long as the housing loan is not fully repaid or the property is not sold.

The latest property cooling measures introduced by the Monetary Authority of Singapore (MAS) in January are timely in reducing the increasing investment and speculative demand in the property market spurred by the extremely low interest rate environment.

With the latest restrictions on residential and industrial properties, we have seen an increase in number of enquiries and applications for commercial property loans. What are some of the basic things to look out in a commercial property loan?

Investing in commercial property is deemed to have higher risks compared to investing in residential property. One of the reasons is due to the fact that commercial property is restricted to commercial use only. To banks, it may not be as easy to dispose off a commercial property in times of loan default and repossession compared to a residential property. To the investors, in times of poor economic condition, a commercial property may take a longer time to be tenanted out compared to a residential property, which could otherwise be turned into owner occupied property or tenanted at a lower rate.

Published on 31 Jan 2013 Lian He Zao Bao, HousingLoanSG.com gave our view about possible increase in housing loan rate...

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