View Full Version : Home loans rise despite fall in sales
Home loans rise despite fall in sales
by Linette lim
04:45 AM Jul 07, 2011
SINGAPORE - Most indicators are pointing to a gradual moderation in the property market here, but latest figures showing a 1.4 per cent month-on-month growth in home loans have some analysts wondering if the outlook is quite so clear cut.
Latest figures from the Monetary Authority of Singapore showed that building and construction loan growth in May fell 13 per cent month-on-month to S$59 billion.
New private home sales also declined 13 per cent from April to 1,575 units in May.
The Urban Redevelopment Authority's private residential property price index also showed that private home prices have been moderating for seven consecutive quarters.
However, home loans increased by 1.4 per cent in May to S$119.7 billion, representing a 0.3 percentage-point rise after falling 0.2 percentage-point in the previous month, suggesting that investors could still be bullish on the property market.
Some analysts expect home loan growth to remain firm for the rest of the year, prompting possible further cooling measures.
Mr Song Seng Wun, regional economist, CIMB, said: "We've seen a pick up in the lending into the broader market with the May figures. If we also see that in June and July, despite signs out there pointing to perhaps a moderation in economic growth, then I think it will suggest the Government ought to do a bit more in terms of cooling down sentiment."
For now, the growth in home loans looks likely to stay. But external developments such as debt issues in the United States and the euro zone could affect sentiment in the property market.
This probably just indicates that more buyers are going in to buy CCR rather than OCR. Just for argument sake, one CCR unit price = 3 OCR? Thus when numbers of buyers falls, bank loans increase. :D
or people are buying completed property?
I believe banks don't put the loan into their books till they disburse to developers...that can explain it..
could be more buying with 80% loan. :cheers6:
The data is misleading. It could be due to developers demanding more money from owners as the projects are progressively completed. Or it could be due to more fresh loans.
kingkong1984
07-07-11, 21:37
Could even include those on deferred payment schemes.
This probably just indicates that more buyers are going in to buy CCR rather than OCR. Just for argument sake, one CCR unit price = 3 OCR? Thus when numbers of buyers falls, bank loans increase. :D
Just spoken to a banker. properties <1.5m selling well, those above >1.5m ghost town.
Magic number has moved from $1million to $1.5million. :rolleyes:
Just spoken to a banker. properties <1.5m selling well, those above >1.5m ghost town.
1.5m seem quite low...I thought the figure should be closer to 2m
Condo Kaiser
08-07-11, 00:07
Bro CCR... you cannot use your guage of price...
they are talking abt 3/4 br OCR... 1.5m is upper limit for those buyers...
for CCR... where got upper limit one? the latest caveats for D9 and D10 got so many 5m-8m transactions....
devilplate
08-07-11, 00:37
Bro CCR... you cannot use your guage of price...
they are talking abt 3/4 br OCR... 1.5m is upper limit for those buyers...
for CCR... where got upper limit one? the latest caveats for D9 and D10 got so many 5m-8m transactions....
Excluding landed, got many 5-8mil transaction meh?:confused:
Condo Kaiser
08-07-11, 00:50
Martin place - 6.9mil
Ardmore 2 - 5.8mil
Ardmore park - 8.2mil
Draycott 8 - 7.1mil
Four seasons park - 6.2mil
Grange residence - 7.8mil and 8.2mil
Latitude - 6.1mil
The Grange - 4.2mil
and there are more than 10 others between 2mil - 5mil....
this is just data from between june 8 to june 14....
Of cos this is a small percentage in terms of number of transaction.. but i feel the bigger trasactions are creeping up... which is a good sign.. meaning foreign money is slowly coming back to sg....
still remember for a long time in 2009 and 2019.. D9 and D10 in buisiness times always very few transactions...
Magic number has moved from $1million to $1.5million. :rolleyes:
Last time in early 09 the magic number was 800k. :(
Magic number has moved from $1million to $1.5million. :rolleyes:
If 2nd,etc property, mean 60%LTV, mean need to fork out 40%x$1.5m=$600k + buyer stamp duty, sizable upfront....surpass $0.5m Liao....
kingkong1984
08-07-11, 06:06
Last time in early 09 the magic number was 800k. :(
Now is 1 mil only. 1.5 is the upper limit, lower limit 0.5 million.
The ambiguity of that article merely stirred much unconclusive debate among us. The only thing for sure is number of buyers have fallen consistently but the prices are still climbing climbing climbing. Therefore higher loan amount with less number of loans! As I mentioned before, I'll say again, this trend cannot persist forever because it simply doesn't support the fundamentals of mathematics. It will end but when? :p
devilplate
08-07-11, 09:26
The ambiguity of that article merely stirred much unconclusive debate among us. The only thing for sure is number of buyers have fallen consistently but the prices are still climbing climbing climbing. Therefore higher loan amount with less number of loans! As I mentioned before, I'll say again, this trend cannot persist forever because it simply doesn't support the fundamentals of mathematics. It will end but when? :p
May not b accurate by looking at volume now due to cm
Your feedback is most appreciated !
Thankyou
Wild Falcon
08-07-11, 10:25
Just means that buyers are taking up more loan to buy their property. So for instance, on average, in the past, most people take 50% loan and pay 50% cash and buy within their means and pay up the loan say in 10 years. Nowadays, with cheap and easy credit, people buy bigger ticket property, take up more leverage to finance, and take 80% loan and 20% cash and pay within say 30 years. Average income has not increased significantly; people are just taking on more debt to buy higher value properties.
Wild Falcon
08-07-11, 10:32
And if the foreigner speculators are back in droves in CCR properties as some of you have observed, then the stats imply that that they're also using debt to fund their multi million purchases which is not healthy.
But now there is 40 % LTv... So I think must be buyers buyer higher priced condo
Condo Kaiser
08-07-11, 11:15
yup... traditionally people who buy properties above 2mil seldom take 80% loan...
so now ltv 40% to them is just the norm...
So I think it doesn't mean just because loan growth go up, there is overheating... Too simplistic to make this conclusion....
So I think it doesn't mean just because loan growth go up, there is overheating... Too simplistic to make this conclusion....Don't worry... don't think many people are making that assumption yet... just analyzing the results... :o
yup... traditionally people who buy properties above 2mil seldom take 80% loan...
so now ltv 40% to them is just the norm...
those people who used to buy 2mil properties are now in the market for 4mil properties.
So I think it doesn't mean just because loan growth go up, there is overheating... Too simplistic to make this conclusion....
It is highly possible that more people are taking up bigger loan to take advantage of the record low interest rate and setting aside more cash for future investment.
It is highly possible that more people are taking up bigger loan to take advantage of the record low interest rate and setting aside more cash for future investment.If this is the case, in 2 years' time or so, in the event that interest rates shoots through the roof, these people who are still under the 4 yr SSD will be trapped big time with 8% SSD still... :scared-3:All the best to them man... :o
kingkong1984
08-07-11, 16:50
It is highly possible that more people are taking up bigger loan to take advantage of the record low interest rate and setting aside more cash for future investment.
Let me rephrase it for u.
It is highly possible that more people are getting into bigger DEBT to take advantage of the record low interest rate and setting aside more cash for future LOSSES...
Hahahahaha.... how about that?
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