Home buyers unfazed by loan
curbs
Some condo showflats packed, business brisk
a day after new limits on mortgages kick in
Rachel Chang
Amanda Tan
Some condo showflats packed, business brisk a day after new
limits on mortgages kick in
Despite new restrictions on the length of home loans that took
effect yesterday, house hunters did not stay away from condominium
showflats islandwide.
At new launches like Riversails along the Punggol waterfront and
Cityscape at Farrer Park, showrooms were packed and agents said
that business was brisk.
At a 748-unit development in Bedok South called eCO, for
example, at least 20 units were sold yesterday.
The Monetary Authority of Singapore (MAS) said on Friday that it
was capping the length of a home loan at 35 years.
It also lowered the loan limits for those who take loans past 30
years, or which extend beyond the retirement age of 65.
Such buyers can take a loan of only 60 per cent of the
property's value, down from 80 per cent, starting yesterday.
This means an upfront payment in cash of 40 per cent of the
property's price.
If it is their second or more loan, the loan limit shrinks
further to 40 per cent - they must fork out a cash down payment of
60 per cent of the property's value.
House hunters The Sunday Times spoke to yesterday said they were
aware of the latest changes but they were undeterred.
Mr Ding Ming, 39, signed an option to purchase a two-bedroom
unit at Riversails.
And because it is his second property in addition to his HDB
flat, he could take only a 25-year loan - as a longer one would
mean paying in cash a down payment of 60 per cent of the
condominium's value.
"The rental from my HDB flat will cover it," said the engineer.
"Anyway it's not a good idea to take too long a loan."
At Cityscape, technical manager Kenny Kam, 42, who was applying
for a 30-year loan said he did not have any problem paying the
required 40 per cent down payment.
"I have the liquidity, and it's better than putting the money in
the bank because interest rates are so low," he said.
At the showrooms, the MAS announcement was a constant topic.
Agents were overheard assuaging buyers' fears that property
prices may fall due to the measures.
"In 2010 and 2011, nothing happened," said one, referring to the
cooling measures levied in the last two years by the
Government.
Developers did not yet offer special perks or discounts to
buyers to take the sting out of the new restrictions.
"This would be premature and too much of a knee-jerk reaction,"
said SLP International's research head Nicholas Mak. "I don't
expect them to give perks and discounts until demand drops and puts
them under pressure."
House hunters were sanguine, for the most part. At Skies
Miltonia, Madam Wendy Tang, 44, who works in the education sector,
said that she had always planned for a short-term loan "because I
don't know what will happen in the future".
But there were some who breathed a sigh of relief that they had
dodged the new rules.
Mr Clarence Wu, 45, was at the Riversails showroom with his
family. He had purchased a three-bedroom unit two weeks ago at its
soft launch, but was there to show his parents the unit he had
chosen.
"If the announcement happened two weeks ago, I wouldn't buy
because I would have to put too much cash down," said the forex
trader, who also owns an HDB flat.
He took a 30-year loan for his new condo with a 20 per cent down
payment; under the new rules, he would either have to take just a
20-year loan, or put down 40 per cent down payment in cash.
"I'm lucky I just escaped," he said with a smile.
Top News, The Sunday Times, October 7 2012, Pg 10
