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Thread: Home buyers unfazed by loan curbs

  1. #1
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    Default Home buyers unfazed by loan curbs

    http://www.straitstimes.com/archive/...curbs-20121007

    Home buyers unfazed by loan curbs

    Some condo showflats packed, business brisk a day after new limits on mortgages kick in

    Published on Oct 07, 2012

    By Rachel Chang & Amanda Tan


    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.

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    Can you see what is happening right now in Sinagpore by reviewing the comment of Mr Ding Ming in the article?

    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."

    HDB dweller assume that they can lease out the HDB flat which will still require HDB approval. HDB may have to look into this. It is going to be worst. I believe this person is not a local.

    Quote Originally Posted by reporter2
    http://www.straitstimes.com/archive/...curbs-20121007

    Home buyers unfazed by loan curbs

    Some condo showflats packed, business brisk a day after new limits on mortgages kick in

    Published on Oct 07, 2012

    By Rachel Chang & Amanda Tan


    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.

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    [email protected]

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    Quote Originally Posted by DC33_2008
    HDB dweller assume that they can lease out the HDB flat which will still require HDB approval. HDB may have to look into this. It is going to be worst. I believe this person is not a local.
    Chances of HDB saying yes to flat rental is very high.

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    Quote Originally Posted by DC33_2008
    Can you see what is happening right now in Sinagpore by reviewing the comment of Mr Ding Ming in the article?

    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."

    HDB dweller assume that they can lease out the HDB flat which will still require HDB approval. HDB may have to look into this. It is going to be worst. I believe this person is not a local.
    DC, I worry for those who borrow to the hilt for their condo and assume that the rental of their HDB will be able to cover the loan.
    Although avo7007 has pointed out that HDB is very likely to approve it, and that we expect our population to increase, what happens if the black swan appears. This group will suffer the most.

    But there again, nothing venture nothing gain.

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    Quote Originally Posted by DC33_2008
    Can you see what is happening right now in Sinagpore by reviewing the comment of Mr Ding Ming in the article?

    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."

    HDB dweller assume that they can lease out the HDB flat which will still require HDB approval. HDB may have to look into this. It is going to be worst. I believe this person is not a local.
    If Mr Ding Ming is a PR, sorry, under hdb new rule, can rent out hdb only 5 yr max!

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    MM Lee said our new SCs/SPRs very motivated, very hardworking, very hard driving ... we need more people like Mr Ding so I can flip my unit to them
    Ride at your own risk !!!

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    if hdb don't approve then they are better off selling it and buy a mm with the money.

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    Mr Ding prefers Singapore for its security, safety and proven track record

    Ride at your own risk !!!

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    Quote Originally Posted by leesg123
    If Mr Ding Ming is a PR, sorry, under hdb new rule, can rent out hdb only 5 yr max!

    Does make a diff if pr or sgp? Both group also rent out hdb to finance pc. Look at YT? He even worst parent in law n mum in law also pull in.

    Its common practice. So if they want to do it then let it be. Its part pf a upgrade process. If black swan happen n they over leverage means some one get to buy cheap!!!

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    Quote Originally Posted by minority
    Does make a diff if pr or sgp? Both group also rent out hdb to finance pc.
    As leesg123 has pointed out, PR can only rent out max 5 years.
    Also PR flat owners can only let out their HDB flat 1 year each time.

    "When the one-year period expires, HDB said application for any extension will be assessed on a case-by-case basis, adding that approval will be granted only if there are extenuating reasons ..........................

    PRs can now only rent out their flats for a total period not exceeding five years."

    http://www.channelnewsasia.com/stori...212863/1/.html

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    RESIDENTIAL PROPERTY | Staff Reporter, Singapore
    Published: 2 hours 52 min ago
    119 views

    3 exceptional things about the latest home loans rule

    Mortgage repayment may fall around 24-25% higher.

    Here are Nomura's three distinctions of the latest round of measures announced by MAS on October 5:
    The latest measures were announced by the MAS and not the URA.
    Restrictions are imposed on first-time home-buyers for the first time.
    The slightly more hawkish tone (“we will do what it takes to cool the market” from previously “to promote a sustainable residential property market where prices move in line with economic fundamentals”).

    Will the market still find its way around the new rules?
    According to the MAS, “more than 45% of new residential property loans granted by financial institutions have tenures exceeding 30 years”.

    Moreover, based on our estimates, unless home buyers have ample equity capital, mortgage repayment could now be 24-45% higher than before.

    Theoretically, therefore, there should be some impact on housing demand from the latest measures. In reality however, we suspect the market will still find its way around the new rules.

    Moreover, most of the purchases are done in the pre-sales market, which means the monthly mortgage service during the
    construction period is still relatively low despite the new measures. The most likely outcome, in our view, is therefore a period of lower transaction volume for a month or two before activity starts to pick up again and the government has to think of new curbs, again. In short, we do not expect this to be the last we see of this cat-and-mouse chase.

    -sbr

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    I find singapore home buyers a bit stupid, if they can see that the govt is trying to help them, they should just play along and let the cm cool the market first before buying. The latest cm is targeted at developers mainly I feel. If they keep flooding showflats n issue cheques like nobody's business, they are not doing themselves a favour.

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    Quote Originally Posted by Regulators
    I find singapore home buyers a bit stupid, if they can see that the govt is trying to help them, they should just play along and let the cm cool the market first before buying. The latest cm is targeted at developers mainly I feel. If they keep flooding showflats n issue cheques like nobody's business, they are not doing themselves a favour.

    It's herd instinct lah. No one wants to miss a 'good' deal. If so many people r rushing to buy, can't be wrong!

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    They buying at historical prices so what good deal?
    Quote Originally Posted by Werther
    It's herd instinct lah. No one wants to miss a 'good' deal. If so many people r rushing to buy, can't be wrong!

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    bro Regulator does have a point,

    if the result is lower outright prices, then affordability increases even with stagnant salary and shorter tenure. net net your outlay per mth could well be same.

    but u and I all know whether prices will drop...

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    bro regulator u are only half right, Singapore economy is so open ...even if less Singaporeans go to showflat but if HK property market chiong to the sky at the same time, how can Singapore not following ...after all we are so kiasu

    and among the property developers I respect Kwek Leng Beng, he always speaks the truth but we don't listen to him ... he said "sentiment" is everything

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    Do you think so? Resale HDB flats are still escalating because of this group of people. More policy is coming on this group (rent hdb and buy PC)?
    Quote Originally Posted by avo7007
    Chances of HDB saying yes to flat rental is very high.
    Last edited by DC33_2008; 08-10-12 at 20:49.

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    Quote Originally Posted by DC33_2008
    Do you think so? Resale HDB flats are still escalating because of this group of people. More policy is coming on this group (rent hdb and buy PC)?
    Any cases of a fully eligible flat owned by citizen being rejected for permission to rent before?

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    Yup. Reason not valid.
    Quote Originally Posted by Kanarazu
    Any cases of a fully eligible flat owned by citizen being rejected for permission to rent before?

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    Quote Originally Posted by buttercarp
    As leesg123 has pointed out, PR can only rent out max 5 years.
    Also PR flat owners can only let out their HDB flat 1 year each time.

    "When the one-year period expires, HDB said application for any extension will be assessed on a case-by-case basis, adding that approval will be granted only if there are extenuating reasons ..........................

    PRs can now only rent out their flats for a total period not exceeding five years."

    http://www.channelnewsasia.com/stori...212863/1/.html
    Not a big deal at most rent out the pc. Or sell thw hdb or become citizen n enjoy the perk of renting out.

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    Quote Originally Posted by Regulators
    They buying at historical prices so what good deal?

    Greed..... Plus kia su.......

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    Just too much positive reaction looking at newspapers and tv coverage on the latest CM. Not a good sign.
    Quote Originally Posted by minority
    Greed..... Plus kia su.......

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    Quote Originally Posted by DC33_2008
    Do you think so? Resale HDB flats are still escalating because of this group of people. More policy is coming on this group (rent hdb and buy PC)?

    Its senstive u dont allow then u burst the upgrader dream.

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    Quote Originally Posted by DC33_2008
    Yup. Reason not valid.
    Any examples of invalid or valid reasons to share? Thanks...

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    This is bad ......... veryyyyyyy bad.
    It's telling the bald man & KBW your CMs all no use.

    As I said before, don't make the man in charge angry.
    At first THE MAN is puzzled why all the CM not effective
    After reading the article he will be angry, very angry
    An angry man can become a confuse man
    A confuse man can become a lost man
    A lost man come out with the new CM
    A CM which will make everyone fainttttttttttttttttttttttttt

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    Quote Originally Posted by DC33_2008
    Just too much positive reaction looking at newspapers and tv coverage on the latest CM. Not a good sign.
    Wat u mean? Honest question.

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    Quote Originally Posted by DC33_2008
    Just too much positive reaction looking at newspapers and tv coverage on the latest CM. Not a good sign.
    yeah, like we taunting them for more CM. Not good.

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    Quote Originally Posted by kane
    yeah, like we taunting them for more CM. Not good.
    OIC.

    I have my own view.

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    Quote Originally Posted by DC33_2008
    Do you think so? Resale HDB flats are still escalating because of this group of people. More policy is coming on this group (rent hdb and buy PC)?
    what can they do...

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    Quote Originally Posted by radha08
    what can they do...
    They can't really do much to HDB owners indeed... this group of housing provides the foundational tier in our housing system. If it is rocked, it's gonna send shock waves up the entire spectrum of property owners...

    HDB rental cannot be removed otherwise big big problem!!! demands for private home rental will spike and then total mayhem.

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