Source : Straits Times – 16 Sep 2009
No need for price change as few take up absorption scheme, say developers
PROPERTY developers were sticking to their prices yesterday following the Government’s announcement of a slew of measures designed to cool the market.
At two of Singapore’s more eagerly anticipated launches, The Interlace and Hundred Trees, developers said they did not foresee any need for price adjustments.
A spokesman for CapitaLand said it was holding prices at between $850 and $1,150 psf for The Interlace at the former Gillman Heights site.
She noted that less than 5 per cent of buyers at the developer’s other new property – The Wharf Residence, launched earlier this year – had opted for the interest absorption scheme (IAS) abolished by the Government on Monday.
The scheme, popular among investors and speculators, allowed buyers to put down a deposit and make no further payments until the property was completed.
City Developments Limited’s spokesman Gerry de Silva played down speculation among property agents that CDL’s upcoming Hundred Trees site would be priced under $950 psf, saying that no price had been set yet.
Mr de Silva said the government measures would ‘have minimal effect on our plans to launch Hundred Trees and other developments’.
He also cited the low take-up rate of IAS among purchasers.
Buyers and analysts hope the measures unveiled by the Government on Monday – which include the removal of the interest-only housing loans (IOL) and a return to a confirmed list for land sales – will help keep out speculators and allow prices to more accurately reflect real demand.
However, analysts such as Citi economist Kit Wei Zheng forecast that even with fewer speculators, demand is likely to remain strong and prices continue to rise, albeit at a slower pace.
He cited recovery in the economy and job market and a shortage of HDB flats as factors keeping up prices.
Prospective homebuyer Clarence Khoo, 36, said he hoped the new measures would help to soften prices, but admitted that it would not affect his decision to buy property as he was buying for the long term.
Another potential buyer, Mr Darien Tan, 32, who works in the marine industry, fears that property developers will continue to keep prices high.
He has been looking for a suitable condominium unit since returning from Australia last year.
ERA Asia Pacific associate director Eugene Lim said there were no hints of buyers opting to let their options on new properties lapse in anticipation of lower prices in the future.
But PropNex chief executive Mohamed Ismail believed that developers would exercise greater caution because overly pricey properties may turn off buyers.
Royal Bank of Scotland analyst Fera Wirawan believed sentiment may be dampened further if buyers anticipate more cooling measures.
She noted that other measures introduced in the past included limiting permanent residents to one property loan, imposing a stamp duty on sellers and introducing a tax on property gains.
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