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Published October 08, 2012

Showflats continue to see good traffic

New projects at Upp Serangoon View and Yishun report business as usual

By Mindy Tan


[SINGAPORE] Neither the new restrictions on home loans nor the rain kept prospective buyers from condominium showflats over the weekend.

Indeed, it was "business as usual" at newly launched projects Riversails at Upper Serangoon View and Skies Miltonia at Yishun.

According to agents, more than 300 units have been sold at Allgreen Properties' 920-unit Riversails, with at least 20 homes sold over the weekend. Prices of the larger units average slightly over $800 per square foot (psf), while the one-bedroom units average $1,000 psf.

The larger units (three-bedrooms and above) at the 99-year project have been doing well, with quite a few sold to upgraders, noted an agent who did not wish to be named. At the other end of the spectrum, three out of the five stacks of one-bedroom units launched have been sold.

Separately, some 67 per cent of units at the 420-unit Skies Miltonia have found buyers; the developer is offering an 18 per cent discount, and throwing in the option for buyers of certain units to upgrade their flooring to marble.

The figures show that sales are still moving, said Lee Sze Teck, senior manager, training, research and consultancy, at Dennis Wee Group.

"I believe people are there to see if there is any reaction from the developers - if they will offer more incentives, or if they will hold prices stable," he said.

The 748-unit eCO in Bedok South threw in an additional 2 per cent furniture voucher in addition to an array of discounts offered.

HSR Property Group special adviser Donald Han was not surprised at the turnout seen at showflats.

"The feverish pace of launches is driven by sentiment, which is still positive," noted Mr Han. Indeed, activity seen now seems less speculative with most buyers purchasing for occupation, or to upgrade, he said.

"The bottom line is that interest rates are still low. (Apartments are) slightly less affordable now, but where else can you put your money?"

The Monetary Authority of Singapore (MAS) said on Friday that it will set an absolute limit of 35 years on the tenure of all residential property loans. It also lowered loan-to-value (LTV) ratios for new loans with a tenure of more than 30 years.

According to the central bank, the average tenure for new residential property loans jumped from 25 years to 29 over the last three years. Over 45 per cent of new home loans have tenures exceeding 30 years.

Lower initial monthly repayments from long loan tenures and low interest rates may cause borrowers to overestimate their loan servicing ability, warned MAS.

"When interest rates eventually rise, borrowers who have overextended themselves will have difficulties repaying their loans," it said. "If property prices fall, financial institutions may be caught holding the bad loans."