CPF ordinary accounts to continue to attract a 2.5% interest rate till end-2013Source: The Straits Times By: Rachel Tan Central Provident Fund (CPF) members will continue to get a 2.5 per cent interest rate on their on Ordinary Accounts (OA) from Oct 1 to Dec 31 this year, said the CPF Board in a statement on Thursday. The computed CPF interest rate derived from interest rates from local banks for the period May 1 to July 31 this year was 0.21 per cent per annum. As this is below the legislated minimum of 2.5 per cent per annum, the OA interest rate for this period will remain unchanged. To enhance the retirement savings of CPF members, an extra 1 per cent interest will continue to be paid on the first $60,000 of a member's combined balances, with up to $20,000 from the OA. Extra interest from the OA will go into the member's Special or Retirement Account. The concessionary 2.6 per cent interest rate for Housing Board mortgage loans will also remain unchanged from October until the end of the year.
Sales of new private homes plunge 73%Source: Straits Times By Melissa TanTOUGH new loan curbs hammered buying sentiment and sent sales of new private homes plunging to a 43-month low last month. Only 481 units were sold, a striking 73 per cent below the 1,806 shifted in June, according to data from the Urban Redevelopment Authority (URA) yesterday. If sales of executive condominiums (ECs) w...ere included, the number of private home sales was still only 593 in July, down 72 per cent from a 2,119 total in June.
The July figure of 481 was the lowest for monthly sales since December 2009 - when the financial crisis was still raging - when only 481 units were moved. It was also far worse than analyst forecasts that July's new sales would fall by up to 50 per cent from June.
Industry experts said sentiment was hit by loan curbs introduced in late June which capped borrowers' total debt repayments relative to gross monthly income.
Developers responded by holding back launches while buyers turned more cautious over prices.
Only 557 new units were up for sale last month, down 68.5 per cent from June. "Developers are re-assessing their pricing and marketing strategy," said Knight Frank research head Alice Tan.
OrangeTee research head Christine Li said banks were taking much longer to grant in-principle approval, which "could have removed some impulse buying".
Analysts expect sales to remain below 700 units this month due to the Hungry Ghost period but say transactions are likely to rebound in September.
The top-selling project in July was the 463-unit Vue 8 Residence in Pasir Ris, which sold 63 out of 100 apartments launched at a median $1,004 psf. The four other new launches last month sold fewer than 10 units each.
Analysts also said that the new loan curbs and framework - called the Total Debt Servicing Ratio - have had a bigger impact on demand than January's property cooling measures.
SLP International research head Nicholas Mak noted that the overall take-up rate for new launches fell from 70.6 per cent in June to 22.7 per cent last month. In contrast, the take-up rate slid from 68.7 per cent in January to 57.1 per cent in February.
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