Tag Archives: Interest-only Housing Loans

Speculators likely to be hit: Experts

Posted on 15 Sep 2009 | Comments Off on Speculators likely to be hit: Experts

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 →

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Excess liquidity at the heart of the problem

Posted on 15 Sep 2009 | Comments Off on Excess liquidity at the heart of the problem

With interest rates at a low, investors have few options other than property

CALIBRATION seems to be the operative word in the set of measures announced by the government yesterday to ensure a ‘stable and sustainable property market’.

‘The measures are pretty measured, actually,’ a developer said.

That may be fitting. After all, as National Development Minister Mah Bow Tan noted, while the level of speculation is not yet extreme, the package will help pre-empt excesssive price swings.

The government has taken relatively small steps to try and cool the buying frenzy now, which if left unchecked could develop into a full-blown property bubble that will take more draconian measures to prick – as we saw in the historic May 1996 anti-speculation curbs.

These included taxing as income the gains from selling properties within three years of their purchase, slapping stamp duty on those who sell their residential properties within three years of purchase, limiting permanent residents to just one Singapore dollar housing loan each and banning such loans to non-PR foreigners. Continue reading →

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