Move clearly aims to deflate speculative property bubble

(SINGAPORE) Measures announced in Parliament yesterday to cool down the private residential property market are expected to reduce home sales and dampen rising prices.

In particular, the Monetary Authority of Singapore’s (MAS) statement that it will disallow the interest absorption scheme (IAS) and interest-only housing loans (IOL) with immediate effect are clearly meant to deflate the speculative bubble forming in the private residential property market, analysts said.

But right now, it is unclear how much of an impact on demand these steps will have.

Developers, on their part, yesterday said that they will go ahead with planned launches. ‘The IAS was offered when the property market was facing challenging economic conditions during the global financial meltdown,’ said industry body Real Estate Developers’ Association of Singapore (Redas). ‘This change is unlikely to have any significant impact on developers’ future launches.’

A sample survey of recently launched projects by the Urban Redevelopment Authority (URA) showed that the take-up rate of the IAS was about 20-25 per cent. But the percentage varies widely from project to project.

While home buyers were quick to take up the IAS when the market first started on its rebound in Q1 2009, interest in the scheme has been on the wane in recent months as developers have increased the premium that buyers have to pay when they opt for the scheme. Earlier this year, when the IAS first took off in popularity, properties offered under the scheme were priced some 2-3 per cent higher than those sold under the normal progressive payment scheme. But in recent months, developers have increased the premium to as much as 5 per cent.

‘In recent months, home buyers have become more discerning as most developers offer a choice – that is, to purchase with or without the IAS,’ said Gregory Chan, head of consumer secured lending at OCBC Bank. ‘For properties purchased under IAS, the purchase price may be at a premium of at least 2 per cent compared to a purchase under the normal progressive payment scheme.’

Echoed United Overseas Bank’s head of loans division Chia Siew Cheng: ‘While the take-up rate for IAS is good, our normal progressive home loan packages are actually more attractive and popular with home buyers.’

Ho Bee Investment executive director Ong Chong Hua argued that the impact of removing the IAS could be more psychological than real. ‘The thing to note is that whether one buys on IAS or normal progressive payment scheme now, the buyer would have to lock in financing at the point of purchase. This is very different from the old Deferred Payment Scheme where up to 90 per cent of buyers did not get bank loans when they bought a property – potentially creating a situation where they may not be able to complete their purchase if the market crashed,’ he said.

Jones Lang LaSalle’s head of research for South-east Asia Chua Yang Liang pointed out that the removal of the IAS and IOL ‘still does not address the larger fundamental issue of low interest environment that could have a stronger driving force on the recent buying surge’.

However, disallowing the IAS and IOL does have the immediate effect of cooling sentiment and removing inflated demand.

The announcements yesterday signal ‘that the authorities are adopting an incremental approach at deflating house price expectations, with more curbs in the pipeline, should speculative activity continue to persist’, said Leong Wai Ho, senior regional economist at Barclays.

‘Coupled with the sizeable pipeline of residential units that are planned or under construction, the expected increase in vacancy rates over the next two years, especially in the high-end condominium market, suggests that the risks for property prices and rents are firmly tilted to the downside,’ he added.

Under the IAS and IOL schemes, a property purchaser will not have to make any significant payment, apart from the upfront 10-20 per cent downpayment, until the housing project is completed. These schemes are thought to encourage property speculation in a buoyant market where prices are rising rapidly.

Source: Business Times, 15 Sep 2009

Cooling measures to curb speculation; move likely to hit sales, dampen prices

(SINGAPORE) After two recent warnings that it was keeping a close eye on things heating up in the private housing sector, the government yesterday announced cooling measures to ‘temper the exuberance in the market and pre-empt any speculative bubble from forming’.

The Confirmed List land sales will be reintroduced from the first half of next year. The interest absorption scheme (IAS) that helped revive home sales earlier this year after the global financial crash has been scrapped with immediate effect.

While some of the measures had already been anticipated by major developers, property veterans were still a bit taken aback by the speed of the response. In particular, the demand-side measures – disallowing the IAS and the similar interest-only housing loans (IOL) with immediate effect – were expected only later. In addition, the property business has visibly quietened down at showflats over the past two weekends – indicating that buyer fatigue was setting in.

The Ministry of National Development (MND) said that ‘the government has introduced these measures now, because there are signs of increased speculative activity and private housing prices have also increased significantly since June 2009′.

MND added that a sample survey of recently launched projects showed that the take-up rate of the IAS was about 20-25 per cent.

Announcing the measures in Parliament yesterday, National Development Minister Mah Bow Tan warned that the government would continue to monitor the property market closely and would introduce additional measures if required.

The government will also do away with five assistance measures extended to developers in Budget 2009 earlier this year when they expire, mainly in January 2010. The measures include allowing developers more time to complete their housing projects, permitting re-assignment of government sale sites and giving up to two years of property tax deferral for land under development.

Collectively, the measures are expected to reduce home sales and dampen prices. Mr Mah noted that developers sold about 10,000 private homes in the first seven months of this year – more than double the 4,300 units sold in the whole of 2008.

‘The measures will generally bring more supply quickly to the market and that will dampen the buying frenzy,’ said Wheelock Properties (Singapore) CEO David Lawrence. ‘It will be slightly depressing on home prices.’

Market watchers also expect the measures to help weed out speculators.

‘People will pause and review their home-buying decisions,’ said Ho Bee executive director Ong Chong Hua. ‘It will also provide a reality check for developers that have raised prices too aggressively.’

Mr Mah observed in Parliament: ‘We are currently seeing signs of heightened speculative activity, although the level of speculation is not yet extreme.’

His ministry will resume selling land under the confirmed list in H1 2010. Such land sales – which were suspended in October last year – mean selling land parcels on scheduled dates, which could translate to more residential property launches.

Mr Mah said the government will also offer sites for executive condos (a hybrid between public and private housing) in the H1 2010 confirmed list to provide more housing choices. The government will also increase supply on the reserve list – where sites are launched only upon successful application – for H1 2010 to meet possible increase in demand.

‘With reinstatement of the confirmed list and more sites on the reserve list, the public can be assured that there will continue to be a steady supply of private housing,’ said Mr Mah.

Ho Bee’s Mr Ong said: ‘To some extent, developers will look forward to government releasing land as it will relieve pressure on high land prices seen lately at tenders for reserve list sites.’

The IAS and IOL are being disallowed as ‘these schemes could encourage property speculation in a buoyant market where prices are rising rapidly, as they are forms of housing loans that entirely eliminate or substantially lower regular instalment payments for property purchasers in the first few years before the properties are completed’, noted a government statement.

The exception is for uncompleted private residential projects where units had already been offered for sale under IAS before yesterday.

The Real Estate Developers Association of Singapore (Redas) said that the need for IAS and IOL has diminished given the relatively firmer market now. IAS was offered when the property market was facing challenging economic conditions during the global financial meltdown.

‘This change is unlikely to have any significant impact on developers’ future launches,’ Redas said.

Property counters retreated yesterday on the news. CapitaLand fell 3.9 per cent, City Developments shed 7.6 per cent and Keppel Land ended the day 6 per cent lower.

Source: Business Times, 15 Sep 2009

SGX among index stocks to weaken; market sentiment also hit by expectations of Wall Street fall

NEWS of fresh anti- speculative property measures such as banning property developers from absorbing interest payments for customers yesterday sent property stocks into a tailspin and added to the generally weak sentiment in the overall market.

With Wall Street expected to open weaker yesterday, the Straits Times Index ended a nett 41.29 points lower at 2,639.74. It had risen 58 points last week and is up almost 50 per cent for 2009 so far.

Most of the pressure came after lunch when news circulated that the government will, with immediate effect, disallow the Interest Absorption Scheme and Interest Only Housing Loans.

According to the government’s press release, the reason is because both schemes ‘could encourage property speculation in a buoyant market where prices are rising rapidly as they are forms of housing loans that entirely eliminate or substantially lower instalment payments for property purchasers . . .’.

As a result, the FT-ST Real Estate Index lost 3.3 per cent. It wasn’t all property-related selling though – a weak Europe opening suggested Wall Street might slide later yesterday.

The broad market excluding derivatives only managed 90 rises versus 387 falls. Among the few gains was offshore marine play Ezra Holdings, whose shares gained nine cents at $1.89 with 22 million done after the company announced new contracts worth US$152 million.

Deutsche Bank, in a Sept 13 report, called a ‘buy’ on Ezra with a $2.50 target price. ‘With its upcoming high specification vessels, enhanced know-how and expertise and good execution track record, Ezra would be in a strong position to benefit (from increased spending in the global subsea market),’ said the Deutsche report. DBS-Vickers, in the meantime, called a ‘buy’ on Ezra with a 12-month target of $2.20, saying more catalysts can be expected in the months ahead.

Among the index stocks to weaken was Singapore Exchange, which ended 15 cents weaker at $8.58. In downgrading SGX to ‘neutral’, UBS Investment Research (UBSIR) said last Friday that the stock has risen 74 per cent this year and is now trading near its 10-year mean price/earnings.

Although SGX is probably inexpensive relative to regional peers such as Bursa Malaysia and Hong Kong Exchanges & Clearing, UBSIR said the stock is fully valued at 21.6x 2010 estimated earnings versus the market average of 15.3. However, the broker raised its SGX target price to $9.20 using a discounted cash flow analysis.

Among other moves of note was a drop in the shares of Chartered Semiconductor, which is the subject of a takeover bid at $2.68 per share from Abu Dhabi’s ATIC. Chartered’s shares finished unchanged at $2.60 after earlier touching $2.58.

The company yesterday said the preliminary opinion of Deutsche Bank, the independent financial adviser to Chartered’s independent directors, is that the offer is fair and reasonable. In the same announcement, Chartered said its independent directors endorsed this view.

Meanwhile, global consulting firm FTI Consulting said yesterday that the majority of 153 fund managers with US$2.8 trillion under management it surveyed recently believe the financial crisis is still not over, largely because the amount of leverage in the system has not been reduced.

‘The prevailing view was that there has been so much economic stimulus that markets cannot help but go up. The concern was what would happen when government money runs out,’ said FTI’s president and CEO Jack Dunne.

Source: Business Times,15 Sep 2009

SINGAPORE – Singapore’s Minister for National Development Mah Bow Tan has just announced measures for a ‘stable and sustainable property market’.

Among other things, his Ministry will resume selling land under the confirmed list in the first half of next year. Such land sales were suspended in October last year in the aftermath of the global financial crash. The Government will also include sites for executive condos, a hybrid between public and private housing, in the confirmed list to offer more housing choices.

Secondly, the Government is banning interest absorption scheme (IAS) and interest-only housing loans (IOL) with immediate effect, i.e. Sept 14, 2009. This measure will apply to all private residential projects. The only exception will be uncompleted private residential projects where units had already been offered for sale under IAS before Sept 14.

Interest-only housing loans will be disallowed with immediate effect. ‘These schemes could encourage property speculation in a buoyant market where prices are rising rapidly, as they are forms of housing loans that entirely eliminate or substantially lower regular instalment payments for property purchasers in the first few years before the properties are completed,’ a statement by the government said.

As well, the Government said that measures announced in Budget 2009 in January this year to help stabilise the property market at the time will not be extended when they expire. Most of the measures expire in Jan 2010 while one expires in Jan 2011.

The measures are allowing a one-year extension of project completion period, allowing reassignment of Government Land Sales site and private land owned by foreign developers, giving developers upto four years to dispose of all private residential units in the development, allowing developers to rent out unsold private residential units for a maximum of four years, and allowing upto two years of property tax deferral for land under development.

‘We are currently seeing signs of heightened speculative activity, although the level of speculation is not yet extreme,’ Mr Mah told Parliament on Monday.

‘The current low interest rate environment has also drawn more buyers into the market,’ he added.

‘It is in everyone’s interest to have a steady property market where prices move stably in line with economic fundamentals. If excessive speculation develops and a property bubble forms, eventually a severe correction must take place,’ Mr Mah said in his speech.

Property counters retreated after Mr Mah’s announcement.

The Government will also increase supply on the reserve list for first half 2010 to meet possible increase in demand. ‘With reinstatement of the confirmed list and more sites on the reserve list, the public can be assured that there will continue to be a steady supply of private housing,’ Mr Mah said. — BT NEWSROOM

Source: Business Times, 14 Sep 2009

But developers gear up for new launches, such as Hundred Trees and Cyan

BUSINESS visibly quietened down at showflats last week but developers are already revving up for new launches and releases of new phases of existing projects after Hungry Ghosts Month ends on Sept 18.

However, some market watchers reckon developers may be more careful not to price their projects too aggressively following National Development Minister Mah Bow Tan’s second statement in five weeks that the government is monitoring the property market very closely and will take ‘certain actions’ if necessary.

City Developments is expected to preview Hundred Trees condo on the former Hong Leong Gardens site in the West Coast area in the last weekend of September. Earlier market talk was that the 396-unit project will have an average price of about $930-$980 per square foot (psf). However, some quarters suggest the project will be ‘priced competitively’.

The 12-storey development has a 956-year-leasehold tenure. The Hundred Trees condo will be decked with Mempat trees, often dubbed the local version of Japan’s sakura or cherry blossoms.

At Keng Chin Road in the Bukit Timah area, Far East Organization is expected to preview in a few weeks a 278-unit freehold condo named Cyan. A stone’s throw away, Keppel Land has sold about 65 per cent of its 56-unit freehold Madison Residences since last month at an average price of about $1,700 psf. This pricing applies to those who opt for the interest absorption scheme (IAS). Buyers who prefer a normal progressive payment scheme pay 2 per cent less.

Even more projects are slated for launch in October, including Ho Bee’s Trilight on the former Elmira Heights site on Newton Road, as developers try to catch possibly the last wave of home buying for 2009 before the year-end school holiday season.

NTUC Choice Homes sold 50 units at its Trevista condo in Toa Payoh last week, mostly on Saturday and Sunday. This is significantly below the 410-unit sales achieved from Friday to Sunday of the preceding week when the developer previewed the 99-year-leasehold condo. To date, Choice Homes has released 550 of the condo’s total 590 units.

‘The remaining units in the project are mostly three and four-bedroom apartments. Prices start from $884 psf or $1.008 million for three-bedders and $850 psf or $1.448 million for the four-bedroom apartments,’ a Choice Homes spokeswoman said yesterday.

Trevista’s initial average price was $898 psf, but with subsequent releases of units – some with better facing and on higher floors – the average price achieved is understood to be about $920-$930 psf.

BT understands that things were even quieter at the Trizon showflat in the Mount Sinai area. Units in the freehold project cost $1,250 psf to $1,550 psf. Sales are said to have plummeted last week after the slightly more than 100 units sold in the previous weekend’s preview.

A property consultant said: ‘When a minister, especially the National Development Minister, comes out to urge buyers to be cautious, it has its effects – at least for the time being.’ ‘When the caution is being urged in the Seventh Month (when traditionally things are a bit slower in the property market), potential buyers have time to reflect on the message,’ he added.

Following six months of surprisingly strong home sales, developers have upped prices. By some estimates, prices of mass-market homes increased about 10-15 per cent from the lows of January-February 2009 to July-August.

In late July, Mr Mah urged home seekers to research the property market thoroughly and seek affordable units. Last week, he advised them to ‘think carefully, think long term, think about the unexpected’ before buying a property.

He also said there is a ‘definite possibility’ that the government will re-introduce land sales through its confirmed list system from next year. Such sales have been suspended since October last year.

All eyes are on today’s tender for a plum 99-year condo plot at Dakota Crescent next to an MRT station and fronting Geylang River.

Source: Business Times, 8 Sep 2009

Brisk weekend sales indicate continuation of strong momentum

SALES of new condominium projects continued at a robust pace last weekend, despite some developers starting to test the market with slightly higher prices.

Buyers picked up 120 units at Waterfront Key in Bedok Reservoir at an average price of $735 per sq ft (psf), even though that price is higher than that at the neighbouring Waterfront Waves condo, where units are going at $700 psf on average.

Both are 99-year leasehold projects and are being jointly developed by Far East Organization and Frasers Centrepoint.

In the Upper Changi area, Hong Leong Group sold 50 more units of The Gale on Flora Road at prices ranging from $650 to $725 psf – up from $650 to $700 psf the previous weekend. This makes 265 units sold to date at the 329-unit freehold development, or about 80 per cent.

In the higher-end segment of the market, City Developments (CDL) has also raised prices for its newly launched Volari@Balmoral by 2 per cent, after it saw a fairly good take-up rate over the weekend.

CDL released 65 units out of a total of 85, and sold about 55 of them. The average price of the units sold was over $2,000 psf, it said in a press release.

The developer added that almost half the buyers were foreigners. Prices start from $2.7 million for a two-bedroom unit.

The transactions over the weekend indicate that this month’s home sales figures are likely to maintain the strong momentum started in February, which has seen more than 1,000 new homes sold every month.

Another interesting point: fewer buyers appear to be taking up the interest absorption scheme, which allows them to defer the bulk of their payments until their apartment is completed but often at a higher price.

Only a third of the buyers at The Gale took up the interest absorption scheme. About 20 per cent of Volari@Balmoral‘s buyers opted for the scheme, which means they paid 2 per cent more for their units.

At Waterfront Key, ‘practically all’ the buyers went with the normal progressive payment scheme, said Far East Organization’s chief operating officer Chia Boon Kuah. This could be because interest absorption for this project comes at a 4 per cent premium.

When asked why the prices were higher at Waterfront Key than at Waterfront Waves, Mr Chia mentioned the project’s ‘thoughtful facilities’, including three outdoor villas and two ‘island villas’, as well as the fact that all units would have views of either the park, reservoir or pool.

The developers released 176 units at Waterfront Key last Friday. A further 102 units will be released during the project’s public launch this Saturday. The condo has 437 units in all.

Of the buyers last weekend, about 60 per cent were HDB upgraders, said Mr Chia. They bought mainly the smaller units: all the 57 two-bedroom units from the first to 15th storeys have been sold, at prices starting from $593,000. The four-bedders, which are 1,518 sq ft in size, are going for up to $1.42 million each.

Source: Straits Times, 21 July 2009

PROPERTY sales over the past few days continued to post encouraging numbers.

City Developments is understood to have sold between 50 and 60 units of its 85-unit Volari@Balmoral condo at Balmoral Road. The 12-storey freehold project, priced at about $2,000 psf on average, will be built on the current Garden Hotel site. Residents will enjoy views of the lush greenery of the Goodwood Hill area. It was released for sale late last week.

Over at Bedok Reservoir, Far East Organization and Frasers Centrepoint have sold 120 units of Waterfront Key at an average price of $735 psf.

This pricing is about 5-8 per cent higher than the $680-700 psf average price at which the two developers are selling units at the adjacent Waterfront Waves, which was 78 per cent sold as of last Thursday. Both projects are 99-year leasehold.

As for their latest condo, the 437-unit Waterfront Key, 176 units have been released since Friday. Far East said that in terms of absolute quantum, prices range from $593,000 for a two-bedroom unit of 840 sq ft to $1.42 million for a 1,518 sq apartment with four bedrooms. The sole penthouse in the initial batch of 176 units is a 2,992 sq ft unit priced at $3.14 million.

Buyers of nearly all the 120 units sold did not opt for an interest absorption scheme (IAS), which comes at a 4 per cent price premium. The units released so far comprise a good mix of reservoir-facing, park-fronting and pool-view apartments. The 15-storey condo has a total of eight blocks.

Volari’s prices range from $1,800 psf to $2,300 psf. BT understands that an IAS is included in the price. However, the majority of buyers are understood to have opted for normal progressive payments, which means that they save 2 per cent on the pricing.

Developers have sold over 7,300 private homes in Singapore in the first six months of this year, surpassing the measly 4,264 units sold for the whole of last year. This has started to give developers some pricing power.

A seasoned property developer said that typically, price stability sets in when developers sell about 5,500 to 6,000 units over a 12-month period.

Increasingly, property analysts are predicting an increase in private home prices for the whole of this year and see the trend gaining momentum in 2010. Analysts’ estimates of full-year sales for this year range from around 9,000 to 14,000 units.

The strong home buying in recent months runs counter to the backdrop of wage cuts and job losses amid the recession.

Analysts credit the revival in home buying to developers’ strategy of chopping prices earlier this year, pent-up demand, the stock-market rally, a low interest rate environment, lack of trust among investors in financial instruments after Lehman’s collapse and the appeal of property as an anti-inflationary hedge.

Source: Business Times, 20 July 2009

Some developers have raised prices as a result

DEVELOPERS continued to report encouraging private home sales last week, and some have upped prices on firmer demand.

BelleRive on Keng Chin Road and Martin Place Residences on Kim Yam Road are among the projects where prices have been raised. BelleRive’s average price is now 13 per cent higher than when it was previewed in mid-April.

Frasers Centrepoint sold 60 more units last week at Martin Place Residences; new units were released over the weekend at prices that were about 5-7 per cent higher.

Chia Boon Kuah, Far East Organization chief operating officer, property sales, told BT that ‘in recent weeks, we’re seeing growing broad-based demand for our products across our portfolio in every price bracket, from upgrader market to the upper-middle segments to high-end luxury projects’.

Last week, the property giant sold more than 40 units, up from the 30 a week earlier. Far East’s home sales for the May 18-24 week include two units at Vida on Peck Hay Road which fetched an average price of $2,030 psf; the buyers did not take up the rental guarantee offered by Far East for the recently completed condo. The developer also sold nine units at Floridian in Bukit Timah at an average price of $1,220 psf.

In the upgrader housing segment, it sold seven units at Mi Casa in Choa Chu Kang, nine units each at Lakeshore near Jurong Lake and Waterfront Waves near Bedok Reservoir. Waterfront Waves is a joint development with Frasers Centrepoint.

Frasers Centrepoint also sold four units each at its Caspian condo in the Jurong Lake location and Woodsville 28 last week.

At Martin Place Residences, the developer released fresh units below the 14th floor sky terrace in the second and final block in the 33-storey condo.

Prices of the freshly released units start from $1,350 psf, higher than the $1,260 psf starting price in the earlier block during the preceding weekend’s marketing campaign.

However, the latest pricing is still below the $1,700 psf starting price for the 33-storey freehold project when it was previewed last year. Inclusive of the units sold last week, 168 units in the 302-unit condo are now sold.

Frasers Centrepoint is offering an interest absorption scheme (IAS) for all its four projects on the market – in exchange for a 3 per cent price premium for Caspian and a 2 per cent premium for the rest.

Over in Bukit Timah, a Sing Holdings subsidiary is understood to have sold five units last weekend at BelleRive, taking total sales to 39 units in the 51-unit freehold project. BelleRive was initially priced at $1,350 psf average when it was previewed in mid-April; this was raised to $1,430 psf last week and upped further to $1,530 psf this week. This translates to a 13 per cent price hike in about six weeks.

The average pricing is for the apartments in the 15-storey project, and excludes the two penthouses. About 75 per cent of BelleRive buyers have taken up the IAS offered by the developer at no extra cost.

The units were picked up predominantly by Singaporeans. BelleRive’s draws include its proximity to Anglo-Chinese School (Primary) on Barker Road and Singapore Chinese Girls’ School along Dunearn Road.

In the Balestier area, Soilbuild is understood to have sold another 25 units at Mezzo over the weekend. The project is priced at about $850-900 psf on average; the cost is 2 per cent more for IAS.

Property giant City Developments also sold 14 units last week for The Arte at Thomson condo. The average price in the project is now $900-930 psf, compared with $880 psf when previews began in March. The 336-unit condo is 84 per cent sold.

Near Botanic Gardens, Straits Trading has upped the price of the remaining few units at Gallop Gables to $1,400 psf, from the $1,188 psf average achieved for units sold in the past six weeks. The price increase comes after the developer achieved the sale of its 40th unit in the completed freehold condo.

In the secondary market, some 50-plus units are said to have been sold last week at RiverGate condo near the Singapore River. These are out of 88 units listed in a sales campaign last week. The average price is about $1,400 to $1,500 psf.

The 88 units were from an original pool of 100 units purchased in 2005 by a fund managed by Ferrell Asset Management.

Source: Business Times, 26 May 2009

THREE prime condominium projects that struggled to generate interest last year saw a surge of buyer activity over the weekend after developers cut their prices.

The freehold 19-storey Parc Centennial in Kampong Java Road – where all 51 units are served by private lifts – sold 32 units at $1,115 per square foot (psf) to $1,233 psf, or from $1.27 million to $1.93 million. This price level is about 20 per cent lower than last year’s $1,450 psf, and the interest absorption scheme is included.

Developer EL Development sold only six units in April and May last year when the project was originally released for sale. And at a private preview in March this year, it sold a 2,486 sq ft penthouse unit for $1,005 psf.

It held a preview this past weekend and has now sold all the two-bedroom units, which start from 1,098 sq ft. The three-bedders increase in size to 1,572 sq ft.

Managing director Lim Yew Soon said he had raised the prices of the remaining 12 three-bedroom units at Parc Centennial by 2 per cent.

Over at the 302-unit Martin Place Residences in River Valley, a soft launch over the weekend saw sales of 80 units at $1,450 psf on average, out of a total of 100 units launched.

Developer Frasers Centrepoint Homes said the ‘attractive pricing’ drew buyers. It released units priced from $1,260 psf to $1,700 psf, compared with the initial 28 units sold at $1,700 psf to $2,000 psf last year.

Singaporeans made up 62 per cent of the buyers at Martin Place Residences, with the rest being permanent residents and foreigners.

Earlier, CapitaLand had reported strong weekend sales at its 173-unit The Wharf Residence.
About 95 per cent of the buyers chose not to take up the stamp duty waiver and interest absorption, preferring a straight 8 per cent price cut, it said yesterday.

Prices started at just below $1,000 psf for units with private enclosed space and many of the weekend deals were done at less than $1,300 psf, industry sources said.

Attractive price cuts, coupled with the recent stock market rally and a fear of losing out, are some of the key factors spurring buyer interest, experts said.

Compared with the situation late last year, buyers are more confident and developers seem to be taking advantage of improving sentiment to relaunch projects at attractive prices, said PropNex chief executive Mohamed Ismail.

Source: Straits Times, 19 May 2009

(SINGAPORE) Is the interest absorption scheme (IAS) helping to grease home sales?