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Thread: Bank Loans Tightened

  1. #1
    xebay11 is offline New Launch Project Specialist
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    Default Bank Loans Tightened

    SINGAPORE, Sept 14 - Singapore will tighten rules on housing loans to make it tougher for people to borrow, National Development Minister Mah Bow Tan said on Monday according to state television.
    With the new rules that come into effect immediately, banks and developers will not be allowed to offer housing loans whereby the borrower only pays the interest and defers repayment of the principal to a later date, Channel NewsAsia said.
    Home prices in Singapore have soared in recent months, with transactions hitting record monthly highs, as buyers flock to showrooms for new apartments.

    Property prices to fall?

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    woohoo, anti speculation whacking has started.


    Quote Originally Posted by xebay11
    SINGAPORE, Sept 14 - Singapore will tighten rules on housing loans to make it tougher for people to borrow, National Development Minister Mah Bow Tan said on Monday according to state television.
    With the new rules that come into effect immediately, banks and developers will not be allowed to offer housing loans whereby the borrower only pays the interest and defers repayment of the principal to a later date, Channel NewsAsia said.
    Home prices in Singapore have soared in recent months, with transactions hitting record monthly highs, as buyers flock to showrooms for new apartments.

    Property prices to fall?

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    Quote Originally Posted by xebay11
    SINGAPORE, Sept 14 - Singapore will tighten rules on housing loans to make it tougher for people to borrow, National Development Minister Mah Bow Tan said on Monday according to state television.
    With the new rules that come into effect immediately, banks and developers will not be allowed to offer housing loans whereby the borrower only pays the interest and defers repayment of the principal to a later date, Channel NewsAsia said.
    Home prices in Singapore have soared in recent months, with transactions hitting record monthly highs, as buyers flock to showrooms for new apartments.

    Property prices to fall?

    You can post the web link?

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    Quote Originally Posted by sabian
    You can post the web link?
    http://www.channelnewsasia.com/stori...004850/1/.html

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    lol PAP steps in at last

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    Quote Originally Posted by sabian
    You can post the web link?
    Straits Times article :

    THE Government has stepped in to temper exuberance in the property market and preempt speculative bubble from forming.
    With immediate effect, it will make it tougher for home buyers to borrow by disallowing interest absorption scheme and interest-only loans to prevent excessive speculation, National Development Minister Mah Bow Tan announced in Parliament on Monday.
    This means that banks and developers will not be allowed to offer housing loans whereby the borrower only pays the interest and defers
    repayment of the principal to a later date.
    Mr Mah also announced that the Government will reinstate land sales through its confirmed list system and increase the supply of sites under the "reserve list".
    Sale of state land under the confirmed list was suspended for the first half 2009 Government Land Sales (GLS) Programme to help stave off oversupply risk as the property market here was then on a downtrend.
    Instead, state land was only made available under the 'reserve' list system for the first half of the year.
    Under the reserve list system, the government releases a site for sale only if an interested party submits an application with a minimum price that is deemed acceptable.
    By contrast, land parcels under the confirmed list will be tendered according to scheduled dates - which could translate to more residential property launches.
    Mr Mah said speculation was trickling back into the property market and the measures were taken to prevent the overheating.
    New home sales in Singapore have shot through the roof recently. Resale prices of many popular projects have also risen from the lows early this year.

    What is more drastic is that it has disallowed Interest Absorption Scheme. Similar to the ban on the DPS earlier. This will hit a lot of potential buyers and cause them to think twice.

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    xebay11 is offline New Launch Project Specialist
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    Showrooms will be empty now.

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    Thanks all

    It will not do much as IAS is rather stringent compared to DPS and most buyers lately did not opt for IAS.

    But the move (to suspend IAS) itself will be louder than the actual suspension of IAS. It signifies the govt's stand that prices are a little too high.


    The high-end hasn't had its day in the sun yet so until that happens...

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    Quote Originally Posted by xebay11
    Showrooms will be empty now.
    doubt so...if you read the fine details, this IAS scheme withdrawal is only applicable to developments launched after today.. existing showrooms offering IAS will still be able to offer this scheme (same as the DPS withdrawal)..

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    Agents for the coming Hundred Trees and The Interlace will be .

    Now I think no more need to submit blank cheque to go look-see during the VVIP preview liao.

  11. #11
    xebay11 is offline New Launch Project Specialist
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    Flippers would be badly affected if prices come down due to this negative sentiment.

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    xebay11 is offline New Launch Project Specialist
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    Quote Originally Posted by WolleyDragon
    doubt so...if you read the fine details, this IAS scheme withdrawal is only applicable to developments launched after today.. existing showrooms offering IAS will still be able to offer this scheme (same as the DPS withdrawal)..
    Yes but flippers would be absent this time, as they would be unsure of where prices will go now.

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    there is always 2 sides to everything.. less speculation if it translates to less pple buying properties if they belong to the group (little/no holding power) who can only afford 20% downpayment n balance upon TOP. Developers will be more cautious in pricing their new launches without IAS. I would prefer a healthy growth in property prices rather than sudden escalation in psf in OCR/RCR with peak high prices

    On a side note, many recent new launches have also seen pple preferring normal progressive scheme with more discounts like prime properties in Volaris, Sophia - only 20% opt IAS and several other launches. Assuming those buying into properties are cash rich w/o IAS makes no diff if the buying trend continues

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    Quote Originally Posted by xebay11
    Yes but flippers would be absent this time, as they would be unsure of where prices will go now.
    yah agreed flippers who caused prices to go up might probably be gone if they buying with only 20% down

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    Quote Originally Posted by xebay11
    Yes but flippers would be absent this time, as they would be unsure of where prices will go now.
    Think this is good news to nip any potential "bubble" in the bud. Prices will stablize or appreciate according to real market condition and sentiments.

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    let's see how many options expire in the months ahead...

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    The news is anticipated by both developers and buyers as Mah hinted few times already. SGX property counters all very red after the news.

    Everyone should agree this is good for long run ....

    Let's see whether the developers will lower asking price 2moro .....

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    Default to what extent the GLS will be?

    Business Times - 14 Sep 2009

    S'pore govt acts to cool property market SINGAPORE - Singapore's Minister for National Development Mah Bow Tan has just announced measures for a 'stable and sustainable property market'.
    Among other things, his Ministry will resume selling land under the confirmed list in the first half of next year. Such land sales were suspended in October last year in the aftermath of the global financial crash. The Government will also include sites for executive condos, a hybrid between public and private housing, in the confirmed list to offer more housing choices.
    Secondly, the Government is banning interest absorption scheme (IAS) and interest-only housing loans (IOL) with immediate effect, ie Sept 14, 2009. This measure will apply to all private residential projects. The only exception will be uncompleted private residential projects where units had already been offered for sale under IAS before Sept 14.
    Interest-only housing loans will be disallowed with immediate effect. 'These schemes could encourage property speculation in a buoyant market where prices are rising rapidly, as they are forms of housing loans that entirely eliminate or substantially lower regular instalment payments for property purchasers in the first few years before the properties are completed,' a statement by the government said.
    As well, the Government said that measures announced in Budget 2009 in January this year to help stabilise the property market at the time will not be extended when they expire. Most of the measures expire in Jan 2010 while one expires in Jan 2011.
    The measures are allowing a one-year extension of project completion period, allowing reassignment of Government Land Sales site and private land owned by foreign developers, giving developers upto four years to dispose of all private residential units in the development, allowing developers to rent out unsold private residential units for a maximum of four years, and allowing upto two years of property tax deferral for land under development.
    'We are currently seeing signs of heightened speculative activity, although the level of speculation is not yet extreme,' Mr Mah told Parliament on Monday.
    'The current low interest rate environment has also drawn more buyers into the market,' he added.
    'It is in everyone's interest to have a steady property market where prices move stably in line with economic fundamentals. If excessive speculation develops and a property bubble forms, eventually a severe correction must take place,' Mr Mah said in his speech.
    Property counters retreated after Mr Mah's announcement.
    The Government will also increase supply on the reserve list for first half 2010 to meet possible increase in demand. 'With reinstatement of the confirmed list and more sites on the reserve list, the public can be assured that there will continue to be a steady supply of private housing,' Mr Mah said. -- BT NEWSROOM

    Copyright 2007 Singapore Press Holdings Ltd. All rights reserved.
    var _rsCI="sg-sph"; /* client ID */ var _rsCG="bt"; /* content group */ var _rsDN="//secure-sg.imrworldwide.com/"; /* data node */ var _rsDT=1; /* to turn on whether to get the document title, 0=off 1=on */ var _rsSE=1; /* to turn on surveys, 0=off 1=on */ var _rsSM=0.1; /* maxumum survey rate, 1.0=100% */ var _rsSS=500; /* sample size */ var _rsCL=1; /* link overlay, 0=off 1=on */ document.write('');

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    what means by mr. mah ? so price will down as fast as it goes up !? mkt is crazy.... i tot we are in a 30yrs most serious recession...

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    I hope the remove of IAS can bring good news to the resales market. I don't understand why a lot of current buyers still go for developer units rather than resales units where they can buy at a lower price.

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    CDL share dropped drastically this afternoon. I think it is due to this news as they are launching 100 trees but with this rule kicks in, I believe there will be less sales.

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    [quote=dormer]I hope the remove of IAS can bring good news to the resales market. I don't understand why a lot of current buyers still go for developer units rather than resales units where they can buy at a lower price.[/quote


    For investors, the resales units looks cheaper mainly because developers have been pushing the price up since there are demand. for example (1)speculators swamping showflats (2)Give blank cheques? no problem, (3)Loan shceme via IAS, pay interest only loan (4) Aiya, anyway since TOP in 3yrs time, alot of time to sub-sales.

    So with this attitude, buyer love to buy new units rather than ready units. Anyway, rental market is still soft, what for buy ready unit?


    With this news kick-in, developer going to adjust/drop price accordingly, that means its not going to be good news for open market, why? because resales market also need to adjust/drop price accordingly otherwise how to competite with developer new units? plus rental market is still at bottom. what is there for investors?

    Correct or not?


    MY comment is based from investor point of view. For owner-occupiers intention, open makret/resales market/sub-sales market/preview/VVIP preview/official launch, anytime also can buy as long as one like it.

    Correct or not?

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    [QUOTE=esurprise]
    Quote Originally Posted by dormer
    I hope the remove of IAS can bring good news to the resales market. I don't understand why a lot of current buyers still go for developer units rather than resales units where they can buy at a lower price.[/quote


    For investors, the resales units looks cheaper mainly because developers have been pushing the price up since there are demand. for example (1)speculators swamping showflats (2)Give blank cheques? no problem, (3)Loan shceme via IAS, pay interest only loan (4) Aiya, anyway since TOP in 3yrs time, alot of time to sub-sales.

    So with this attitude, buyer love to buy new units rather than ready units. Anyway, rental market is still soft, what for buy ready unit?
    Like that property counters may see another 15%-20% slide. My gut feel is that STI per se would down 5-10% this October Liao

    With this news kick-in, developer going to adjust/drop price accordingly, that means its not going to be good news for open market, why? because resales market also need to adjust/drop price accordingly otherwise how to competite with developer new units? plus rental market is still at bottom. what is there for investors?

    Correct or not?


    MY comment is based from investor point of view. For owner-occupiers intention, open makret/resales market/sub-sales market/preview/VVIP preview/official launch, anytime also can buy as long as one like it.

    Correct or not?

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    Quote Originally Posted by Cactus72
    CDL share dropped drastically this afternoon. I think it is due to this news as they are launching 100 trees but with this rule kicks in, I believe there will be less sales.
    so this project will price around 700psf?

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    [quote=esurprise]
    Quote Originally Posted by dormer
    I hope the remove of IAS can bring good news to the resales market. I don't understand why a lot of current buyers still go for developer units rather than resales units where they can buy at a lower price.[/quote


    For investors, the resales units looks cheaper mainly because developers have been pushing the price up since there are demand. for example (1)speculators swamping showflats (2)Give blank cheques? no problem, (3)Loan shceme via IAS, pay interest only loan (4) Aiya, anyway since TOP in 3yrs time, alot of time to sub-sales.

    So with this attitude, buyer love to buy new units rather than ready units. Anyway, rental market is still soft, what for buy ready unit?


    With this news kick-in, developer going to adjust/drop price accordingly, that means its not going to be good news for open market, why? because resales market also need to adjust/drop price accordingly otherwise how to competite with developer new units? plus rental market is still at bottom. what is there for investors?

    Correct or not?


    MY comment is based from investor point of view. For owner-occupiers intention, open makret/resales market/sub-sales market/preview/VVIP preview/official launch, anytime also can buy as long as one like it.

    Correct or not?
    100 pct correct. That's the precise reasons why new launches are so popular. Unless rental market pick up, which is rather unlikely in the foreseeable future, 2ndary market will remain in the doldrums unless you are buying to stay!

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    Did Mr Mah said how many % of recent launches went for IAS? From news reports, I got the impression that those majority who can afford will go for the progressive payment which is cheaper.

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    I think we overlooked the message that MBT is trying to bring across. What is the objectives that MBT is trying to achieve?

    I believe the government think property prices has run ahead of income/GDP growth and hence may not be sustainable. So to prevent a bubble from forming, they introduce measures to contain the price increase.

    So think about it....what will happen if say prices continue to soar? Will MBT introduce more measures?? Removing the IAS is just a tool to achieve his objective...which is to contain the price, allow gradual increase in price...

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    Quote Originally Posted by Cactus72
    CDL share dropped drastically this afternoon. I think it is due to this news as they are launching 100 trees but with this rule kicks in, I believe there will be less sales.
    Want healthy sales? lower prices lor hehe ~

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    Quote Originally Posted by kurby
    I think we overlooked the message that MBT is trying to bring across. What is the objectives that MBT is trying to achieve?

    I believe the government think property prices has run ahead of income/GDP growth and hence may not be sustainable. So to prevent a bubble from forming, they introduce measures to contain the price increase.

    So think about it....what will happen if say prices continue to soar? Will MBT introduce more measures?? Removing the IAS is just a tool to achieve his objective...which is to contain the price, allow gradual increase in price...
    I am more interested to see what he is going to do about HDB prices. Afterall HDB is public housing, and thanks to the pap govt has right now become the most expensive public housing in the world. He must do something, or there may be political price to pay.

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    Quote Originally Posted by august
    I am more interested to see what he is going to do about HDB prices. Afterall HDB is public housing, and thanks to the pap govt has right now become the most expensive public housing in the world. He must do something, or there may be political price to pay.
    The only thing they can do is just to stablise the price but it would remain as the most expensive public housing. If they do more than that by causing the price to come down, they would have to pay a bigger price.

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