http://www.straitstimes.com/archive/...curbs-20130907

New launches to test sting of loan curbs

At least 1,600 homes, 90 commercial units to hit market in next few weeks

Published on Sep 07, 2013

By Cheryl Ong


JUST how much tougher new lending rules are affecting the property sector will be seen over the coming months when a flood of new homes is released, with the first test this weekend.

Five projects have either been launched or opened to preview this week while overall, at least 1,600 homes and 90 commercial units will hit the market over the next few weeks.

R'ST Research director Ong Kah Seng said the response from home seekers today and tomorrow will be a handy gauge for developers and will indicate if there is still a large underlying pool of buyers. "Usually after cooling measures are implemented, the first one to two months will be fairly quiet.

"We are now in the third month after the total debt servicing ratio (TDSR) was put in place," he added.

The framework introduced in June caps total monthly debt repayments to no more than 60 per cent of a borrower's gross monthly income, a move that will restrict the size of some mortgages.

Mr Ong noted that this weekend will be a test of the market because if the response is favourable, the next few launches after this could see good demand too.

The Heeton Holdings project Onze@Tanjong Pagar launched on Thursday with 56 apartments and 13 commercial units up for sale. More will be released at a later date. Home prices in the mixed development will range from $2,200 to $2,500 per sq ft (psf), while commercial units are $5,800 to $7,500 psf.

Two other residential projects launch today - The Glades and The Skywoods, both 99-year leaseholds.

Launch prices atThe Glades in Tanah Merah are expected to range from $1,400 to $1,600 psf.

The 726-unit project, which is jointly developed by Keppel Land and China Vanke, will have a mix of one- to four-bedroom units ranging from 500 to 1,450 sq ft.

The Skywoods at 1, Dairy Farm Heights, which will sell for an average price of $1,250 psf, is being developed by a joint venture between TA Corp, Hock Lian Seng Holdings, King Wan Corp and Far East Distillers.

It will have 420 units, including 70 two-bedroom units, 210 three-bedders and 28 penthouse units. Sizes range from 527 sq ft for a one-bedder to 1,496 sq ft for a four-bedroom flat.

The Straits Times understands that some units were already sold yesterday at The Glades and The Skywoods during private previews held for buyers who had earlier indicated their interest.

TA Corp group chief executive Neo Tiam Boon said it had intended to launch The Skywoods at about $1,300 psf but had to lower prices as interested buyers are finding it harder to get a home loan under the new rules.

Elsewhere, the MacPherson Mall and Thomson Three development open their show-flats for preview today. The MacPherson Mall will have 80 commercial units with a hotel component, while Thomson Three will have 435 residential units.

Despite the tighter loan rules, analysts still expect interest overall to be warm, although buyers will be more price-sensitive.

"It's no longer whether the pricing can attract buyers or not, but whether it also allows buyers to be eligible to purchase the project under the new rules. Anything above the $1,400 psf mark will feel the impact of the TDSR rules," Mr Ong said.

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