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12 July 2013

Non-property loans may be subject to new rules
MAS may extend new debt servicing framework to car and student loans

Source: Straits Times 
By Melissa Tan

A FRAMEWORK that was recently imposed on banks approving property loans may be extended to other types of loans as well.

The total debt servicing ratio (TDSR) framework - introduced last month for property loans - takes into account a borrower's total repayments such as mortgages, car and student loans, and so on.

For those who want a property loan, banks will have to check and ensure that the total monthly debt repayments do not exceed 60 per cent of their gross monthly income.

The MAS said at that time that banks do not have to compute the TDSR of borrowers who apply for non-property loans as such loans make up a much smaller portion of a household's overall debt burden compared with a mortgage.

But it did say that it would "closely monitor the lending practices of financial institutions and data trends for non-property loans, and may consider applying TDSR rules if the need arises".

The MAS told The Straits Times by e-mail last week that it "expects banks to take a holistic and prudent approach in their credit assessment for both property and non-property related loans", even though the TDSR framework only applies to home loans right now.

It added: "The notice requires computation of the TDSR at the inception of the loan, but banks are expected to monitor debt repayments and loan performance on an ongoing basis as part of prudent credit risk management practices."

Tougher rules on non-property loans will affect some bank lending policies as not all take a borrower's total debt obligations into account when assessing applications.

But a few banks already consider a borrower's total debt for car loans.

"When we assess an individual's eligibility for any loan application, including auto loans, we take their existing financial commitments into consideration," said DBS Bank managing director and head of deposits and secured lending Lui Su Kian.

"This would include any outstanding mortgage or other personal loans."

Ms Lui said DBS uses a different set of criteria for unsecured credit facilities such as credit cards.

Citibank Singapore's business director for secured finance and e-business, Mr Peng Chun Hsien, said the bank typically looks at a borrower's total debt commitment when determining his eligibility for both mortgages and car loans.

"In addition to the customers' existing mortgage or car loans, we also take into consideration their unsecured credit lines such as credit cards and personal loans, as well as the loan tenures and the customer's income," Mr Peng added.

The Straits Times also understands that UOB has an existing TDSR framework in place for car loans.

"For all loans, UOB carefully assesses each application using a range of criteria from the applicant's income and credit worthiness to existing liability," a spokesman for the bank said yesterday.

Work starts on Jurong Lake District hotel
Genting's seventh hotel here sited in new business-leisure hub

Source: Straits Times | Money
By Chia Yan Min

THE company behind Resorts World Sentosa (RWS) has started building the first hotel in one of Singapore's newly-emerging business and leisure hubs, Jurong Lake District.

Genting Singapore broke ground yesterday for the new hotel on Jurong Town Hall Road which is slated to open in the first half of 2015.

The Jurong Lake District has been earmarked by the Urban Redevelopment Authority as a new growth area with commercial, business and leisure facilities.

The 550-room hotel, five minutes away from the Jurong East MRT station, is on a 9,027 sq m site and has a 99-year lease.

Tan Sri Lim Kok Thay, chairman of the Genting Group and executive chairman of Genting Singapore, said the new hotel "signifies our commitment to reinvesting in Singapore".

"With our hotel being the first to open in this growing precinct, we hope to create another unique hospitality product that will crank up the buzz meter in this already vibrant area to even higher levels," he added.

Mr Tan Hee Teck, president and chief operating officer of Genting Singapore, said: "We will deliver a product that will bring incremental business to neighbouring merchants, accommodation convenience to companies in the vicinity, and amenities to Jurong West residents."

The new hotel will be the seventh hospitality development for Genting Singapore, which owns six hotel properties at RWS - Crockfords Tower, Hotel Michael, Festive Hotel, Hard Rock Hotel Singapore, Equarius Hotel and the Beach Villas.

The 550-room hotel, five minutes away from the Jurong East MRT station, is slated to open in the first half of 2015.

380-unit exec condo launching in Sengkang

Source: Straits Times | Money 

A 380-UNIT executive condominium (EC) called Lush Acres at Fernvale Close in Sengkang will be launched tomorrow.

While prices have yet to be officially released, Lush Acres will be "competitively priced with affordability in mind", said City Developments (CDL) group general manager Chia Ngiang Hong in a statement yesterday.

Unit sizes range from 915 sq ft for a three-bedder to 1,722 sq ft for a five-bedroom unit.

The project is near the Layar LRT station, the Greenwich V mall and the upcoming The Seletar Mall.

CDL's Verspring Properties lodged a bid of $135 million for the 151,781 sq ft site last November, which works out to $296.50 per sq ft (psf) per plot ratio (ppr). It pipped five other bids including JBE Development's $134.9 million offer - or $296.20 psf ppr - which it edged out by a whisker.

Analysts said last year that the break-even price is expected to be between $560 and $610 psf, and the estimated selling price is likely to range from $670 to $720 psf.

The project consists of three 25-storey blocks and one 22-storey block.

Some units will have a "balcony entrance" allowing people to enter the living room via the balcony, which "simulates the entrance experience of landed living", CDL said yesterday.

The project will also have an "Agri-Cube hydroponic farm... that allows residents to try their hand at growing fresh vegetables by utilising hygienic hydroponic technology in a conducive, cool environment", the developer added.

This is CDL's sixth EC project after The Florida, Nuovo, The Esparis, Blossom Residences and The Rainforest. It is expected to be completed in 2016.

Applications open tomorrow and close on July 21. Bookings will be taken on Aug 17.