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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Originally Posted by reporter2
