Shoebox units help Sky Vue sell 85% of units launched Source: Business Times By:Grace Leong CAPITALAND'S reversal of its former CEO's stand against shoebox units appears to have paid off. The company, which is now led by Lim Ming Yan following the retirement of Liew Mun Leong, said the initial sales launch of Sky Vue at Bishan Central saw 430 units sold out of 505 units released for sale this past weekend. The strong response fuelled cautious hopes of a pick-up in market sentiment following several rounds of property cooling measures. The property giant sold 410 units at an average price of $1,500 per square foot (psf) on Saturday, the first day of sales, plus 20 more yesterday, with one-bedroom and two-bedroom units being the most popular. This compares with 90 units sold this past weekend at Thomson Three, bringing the total to 250 sold out of 320 units released to date, according to a UOL spokesman. The average price of the 99-year-leasehold development, a joint venture between UOL Group and Singapore Land, is about $1,350 psf. "Sky Vue may revive the market," said Savills Singapore research head Alan Cheong. "It shows that people are able to get around the perceived hurdles that TDSR (Total Debt Servicing Ratio) rules set up, if the price is right. It is more difficult to buy property now, so buyers have to be given more reasons or incentives to buy. Perceived value is the catalyst that will draw buyers out." Property market less influenced now by low interest rates Source: Today By: Lee Yen Nee While the United States Federal Reserve’s decision to continue its stimulus programme means that mortgage rates in Singapore are likely to stay low for a while longer, analysts said that the impact on the local property market will likely be limited, as buying habits are now being dictated more by a number of government measures. Low interest rates over a sustained period have been seen as one of the reasons for property prices staying at inflated levels, but analysts say the market dynamics have changed in recent months as the impact has increasingly been felt of multiple cooling measures and, in particular, the introduction of the total debt servicing ratio (TDSR). This means that although the low interest rate environment may continue for a while longer, it is unlikely to be a major factor influencing buying trends. “TDSR has been like a sieve, filtering out the borderline cases, preventing people from buying something that they really cannot afford. The other measures like additional taxes and stamp duties, if there is a chance of good capital value growth, people will still buy,” said Associate Director of CBRE Research Desmond Sim. The TDSR framework has been seen as one of the most significant measures introduced so far in curbing demand for property. The framework requires banks to ensure property loans they grant do not push a borrower’s total debt obligations above 60 per cent of his or her gross monthly income. Data from the Urban Redevelopment Authority showed new monthly condominium sales have fallen below 1000 units since the introduction of the TDSR at the end of June. Meanwhile, although the prospect of interest rates going up sharply in the near future has receded to some extent, discussion about the impact of the Fed’s policies has nevertheless brought into focus in many buyers’ minds the fact that rates will go up at some point. This may act as a further dampener on demand, analysts said. “(Interest rates) may not go up now, but the Fed is meeting every few months, and it doesn’t mean they’re not going to start tapering the next round,” said Mr Nicholas Mak, Executive Director for Research and Consultancy at SLP International Property Consultants. Mortgage rates here are generally set at a premium to the Singapore Interbank Offered Rate (SIBOR), which is pegged to US treasury bond yields. Bond yields in the US have stayed at low levels thanks to the Fed’s monthly US$85-billion (S$106.8 billion) bond-buying programme, which was brought in to stimulate the economy. But even when the Fed eventually starts winding down its bond-buying programme, Chief Executive of International Property Advisor Ku Swee Yong said there is no need to panic. He noted that when the Fed was widely expected to announce moves to taper the programme this month, banks were offering three-year fixed rate home loans at 1.55 to 1.7 per cent. “There is nothing wrong worrying about interest rates going up, (but) these are clear indications that the banks are confident their future costs of funds will be lower than these loan rates … their outlook on interest rates are still low at least up till late 2016,” Mr Ku said. |