Tag Archives: IAS

Interest absorption scheme stopped, regular land sales to resume

THE Government has moved to rein in the fast-rising private property market, banning a popular scheme that allowed cash-poor buyers to defer paying the bulk of their purchase price until the property was completed.

With immediate effect, the interest absorption scheme (IAS) can no longer be offered with new properties for sale, National Development Minister Mah Bow Tan said in Parliament yesterday.

He added that the Government is also resuming land sales next year, a move that will increase the supply of new sites and further cool rising prices.

It is doing this by re-introducing a confirmed list of sites that will be put up for sale according to a pre-determined schedule, regardless of developers’ interest.

The Government also announced it will not extend measures introduced in January’s Budget to aid developers in the recession. These included deferring property tax and allowing developers more time to complete their housing projects.

These measures come after weeks of speculation over how the Government would react to an unexpected property boom that has resulted in record sales volumes and a dramatic run-up in prices. Continue reading →

They see limited impact on genuine buyers in axing of interest-only, interest absorption loans

THE removal of schemes that allowed home buyers to defer mortgage payments until the property has been fully built is likely to have the most direct impact on property speculation, say consultants and analysts.

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Interest absorption and interest-only loans – both of which remove or reduce regular instalment payments for uncompleted properties – have been axed with immediate effect.

The step was announced in Parliament yesterday by National Development Minister Mah Bow Tan and is part of a package of measures aimed at restoring stability to a property market that is booming amid a recessionary environment.

Property consultants said the withdrawal of these two loan types will have the biggest effect on housing demand.

‘Removing the interest absorption scheme (IAS) will definitely affect sentiment and consequently demand and home sales,’ said Ms Grace Ng, deputy managing director of property consultancy Colliers International. Continue reading →