Home buyers still flock to showrooms despite new property

New measures kicked in on Saturday to curb speculation in the property market.
A Seller's Stamp Duty will be imposed on all residential properties bought on Saturday and sold within one year, while housing loans from financial institutions will be capped at 80 percent of property value.

Are they taking the buzz out of the property market? Not yet - at least not for those who are buying for the long-term.

It was business as usual at one property showroom on Saturday, as a steady stream of visitors checked out the units available. Sales of units at the Altez condominium - located just opposite Tanjong Pagar MRT station - are moving fast.

One woman in her 30s snapped up four units - two to stay in and two to rent out.
The condominium's developer said they could still sell an entire floor of units within an hour.
Some home buyers said the reduction in the home loan limit did not make much of a difference.
Home buyer Raphael Tan said: "The banks have been very strict, anyway. So I think we will still be on track for our financing."

And those who are buying for the long-term are not worried about the new Seller's Stamp Duty.
Doris Chia, another home buyer, said: "Although it's quite pricey now, I think this is a good location and for long-term investment."

Analysts expect developers to launch more high-end properties in the first half of this year.
These properties typically sell at S$2,000 per square foot and attract buyers and investors who are less price-sensitive.

Donald Han, managing director of Cushman and Wakefield, said: "A lot of the high-end investors are typically not bound by any limitation. They don't go for maximum loan-to-value ratio. In some cases, they just go for 40 to 50% of loan-to-value ratio. In some cases, they even buy on a cash basis."

Analysts said the mood to buy won't change much as the measures are meant to flush out speculators, who make up a small percentage of the market. Meanwhile, Senior Minister of State for National Development Grace Fu said that now is the time to introduce measures to control the private property market. She said the authorities have been studying the property market closely and that it is best to introduce the measures before the property bubble forms.

"We would think that it may deter speculative buying and we want our investors to basically be on the more solid ground when they invest in properties. It should not deter genuine buyers who have the financial resources to hold the property."
- CNA/ir

Government announces 2 measures to cool property market

The Government has introduced two new measures to cool the property market and pre-empt a bubble from forming in the private homes sector. They come into effect Saturday.

The Ministry of National Development said this will help ensure a stable and sustainable property market, and to curtail the HDB resale market where prices tend to track private property movements.

From Saturday, it will be more difficult and expensive for speculators to own and flip properties. A Seller's Stamp Duty will be imposed on all residential properties and residential land bought after Friday, and sold within one year from the date of purchase.

The housing loan limit will also be capped at 80 per cent - down from the current 90 per cent.
This new loan limit will apply to all housing loans granted by financial institutions for private homes, executive condominiums, HUDC flats and HDB flats, including those sold under the Design, Build and Sell Scheme. But loans granted by the Housing and Development Board (HDB) for flats, will still have a cap of 90 per cent.

Last September, the Government introduced anti-speculative measures to cool the private homes market. While these helped initially, there were signs the market was heating up again.
The new measures come as demand for private homes continues to soar. The number of units sold by developers in January was three times more than December. It was also the highest monthly total since September last year.

The Ministry said the objective of these measures is to discourage short-term speculative activity that could distort underlying prices. It is not targeted at the purchase of properties for owner occupation or longer term investment.

Market watchers said the measures are easiest to implement, without causing the market to come to a standstill.

Eugene Lim, associate director, ERA Asia Pacific said: "We are recovering. The economy is recovering and the market is picking up so what they want to do is to make sure the property market is moving up in tune together with the economy and not faster than the economic recovery."

Analysts added that the prices and volume of private property homes are unlikely to be significantly impacted.

Donald Han, managing director, Cushman & Wakefield said: "It has got a fairly minimal impact to the market, mainly because a lot of investors from our records are buying for the medium term, at least for a period of two to three years.

"Some investors will probably stand by the sidelines and see how sales progress into February and March. It will take some wind out of the market; potentially it could be around 10-15 per cent in terms of the numbers of new home sales taken out of the equation."

The Real Estate Developers' Association of Singapore said the reduced mortgage cap is unlikely to have significant impact on genuine buyers and investors, as lending institutions have already been more prudent in the aftermath of the global financial crisis.

- CNA/sc

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New road network in Marina Bay area

A new road network will be built progressively in the new downtown Marina Bay area as part of the Land Transport Authority’s new developments in 2010.

This is to serve upcoming developments such as the Marina Bay Sands Integrated Resort and the Marina Bay Financial Centre.

Motorists travelling to the Marina Bay Sands Integrated Resort can soon use a new bridge and road.

The Bay Bridge connects directly across the Marina Centre to Marina Bay.

Motorists can then continue along Bayfront Avenue towards the Marina Bay Financial Centre.

With the opening of the 1.4 kilometre bridge and road, a new ERP gantry will also be installed.

Yam Ah Mee, chief executive, Land Transport Authority, said: "Together with the Bayfront Avenue road, there’s a need to adjust the CBD cordon and having a new ERP gantry at that location. So that the overall, CBD cordon comprising of the Orchard cordon, the Shenton—Chinatown cordon and the Marina City cordon remains intact.

“And that’s the reason why we are closing the CBD cordon and adjusting it with this new ERP gantry."

The Bayfront Avenue ERP gantry will be up by end—March.

To further adjust the CBD cordon, three more ERP gantries will be erected and will be operational in the third quarter of this year.

The existing gantry along Central Boulevard will be replaced by a new one at Marina Way.
Two other gantries will be on the other side of Bayfront Avenue and Marina Station Road.

In other developments, motorists can look forward to the opening of the Bartley viaduct on Sunday.

The 1.9 kilometre long viaduct marks the completion of the Bartley extension project.

Mr Yam said: "With the opening of the Bartley viaduct, motorists can expect travelling along Tampines Avenue 10 to Bartley to have a time saving of about 10 to 15 minutes and also alternatives to PIE. We expect that up to about five to 10 per cent of motorists, may consider alternatives of travelling on the Bartley viaduct instead of going through PIE."

The Bartley Road extension project, which started in 2000, costs S$208 million.

Source: CNA/vm