http://www.businesstimes.com.sg/arch...igned-20130119

Published January 19, 2013

They came, they saw, but only half signed up

Thanks to cooling measures, only 214 close deal at preview launch of Q Bay Residences

By zeinab yusuf saiwalla


FOUR hundred out of the 500 people who had indicated interest in buying a unit in Q Bay Residences showed up for the preview launch yesterday - but only 214 of them signed on the dotted line to do so.

Elson Poo, the general manager of marketing and sales at Frasers Centrepoint Homes, put their hesitation down to the effect of the government measures introduced to cool the property market.

"If not for the cooling measures affecting the loans available to buyers, we would have sold 300 units," he said.

Among the measures imposed last Friday was the one which lowered loan-to-value ratios from 60 per cent to 50 per cent for those taking up a second housing loan, and from 60 per cent to 40 per cent for those taking third or subsequent loans.

The LTV is a lending-risk assessment ratio which banks look at when deciding whether to approve a mortgage.

It is calculated by dividing the mortgage amount by the value of the property.

Individuals applying for second or subsequent home mortgages now have to pay a bigger cash downpayment too - 25 per cent, up from 10 per cent.

Mr Poo said, however, that those who did not make a purchase yesterday because of the new loan restrictions are likely to return to do so when they have worked out their financing issues.

"We talked to some buyers who said they liked the product very much, but owing to problems with the upfront cash payment, they may take a little more time to consolidate their loans."

Q Bay, which is in Tampines, is the first private condominium launched since the cooling measures were introduced. How well it sells is being closely watched for an indication of the property scene going forward.

SLP International executive director Nicholas Mak said: "Developers are waiting to see what will happen, but the take-up rate of units at Q Bay shows continued demand, and that buyers are responding well to the promotions offered by developers."

Property consultants BT spoke to predicted reduced demand for Q Bay's one to two-bedroom units, since such small units are typically bought for investment by second and third home buyers. These small units make up nearly half of Q Bay's 630 units.

Among the units sold yesterday, however, 46 per cent were one and two-bedroom units.

Mr Mak attributed the relatively strong demand for Q Bay to its Tampines location, which he described as an upgrader's market.

Ong Teck Hui, the national director of research and consultancy at Jones Lang LaSalle, said no new private condominium has come up in Tampines for some time. With Q Bay going at the cost of under $1,000 per sq ft (psf) on average, buyers probably see it as being competitively priced.

Mr Ong added: "Being an HDB heartland condominium, most of the buyers would be HDB upgraders who are first-time private home buyers less affected by the recent measures."

The developers, a consortium of Frasers Centrepoint, Far East Organization and Sekisui House, launched the condominium at an average price of $985 psf yesterday, after dangling a 5 to 7 per cent discount on the stamp duty to cushion the impact of the additional buyer's stamp duty (ABSD) imposed on all buyers except Singaporeans buying their first home.