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H E A R D :

fOrced Out prOperty specUlatOrs

Idle hOt lIqUIdIty

BANG IntO eqUItIes

BEST chOIces ?

GENTING TWINS ?

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Aug 31 2010

Tighter financing regulations will have bite, say experts

IF YOU already have a mortgage on a home, you will need more cash on hand to buy a second property – under new rules announced yesterday.

Buyers with one or more outstanding housing loans will now have to stump up a downpayment of 30 per cent of the property’s price, up from 20 per cent previously. At least 10 per cent must be in cash – up from 5 per cent before – but the remainder can come from their Central Provident Fund (CPF) accounts.

This means that buyers will now be able to borrow up to only 70 per cent of the property’s purchase price, instead of 80 per cent previously.

These new financing rules are more significant measures to cool the housing market, experts said. They added that these moves would weed out speculative activity from the market and prevent buyers from overextending themselves – while leaving first-time buyers unaffected.

The Ministry of National Development said in a statement yesterday that while non-performing loans made up less than 1 per cent of all loans as at the second quarter, there are signs that more borrowers are taking loans of more than 70 per cent of a property’s price.

Local banks yesterday told The Straits Times that they have seen an increasing number of home owners investing in multiple properties in recent years.

United Overseas Bank said most of these home buyers took up financing of up to 80 per cent of the purchase price.

OCBC Bank said that while the majority of its loan applications are for home-owner occupation, it has seen an increase in the number of applications for investment purposes – compared with a year ago. An increasing number of home-loan applicants have applied for loans of more than 70 per cent of the property price, it added.

Kim Eng analyst Wilson Liew said the new measures would ensure that banks remain prudent in their lending practices.

DMG & Partners property analyst Brandon Lee said the rules would also effectively force out speculators.

‘They would have to think twice before buying as the cash outlay now is reasonably higher… Sales volume will probably be hurt across all segments,’ he said.

ERA Asia-Pacific associate director Eugene Lim said the measures would affect demand in the mass-market private property segment.

HSR chief executive Patrick Liew said speculators made up about 20 per cent of the mass-market segment, and that the new measures might flatten the sector for the next two quarters.

Demand could drop by up to 20 per cent in the next few months, as buyers react in a knee-jerk fashion and speculators stay on the sidelines, he said.

However, since economic fundamentals are strong and the market had already been slowing, he does not expect prices to head south.

Instead, Mr Liew thinks prices will hold at current levels before gradually increasing again from the second quarter of next year, because there is still genuine demand in the housing market.

ERA’s Mr Lim said that a significant number of mass-market condo buyers live in HDB flats with outstanding mortgages, so demand for such private homes might take a beating now that the required downpayment has been increased.

Mr Colin Tan, research and consultancy director of Chesterton Suntec International, said the steps ‘had more bite’ than previous ones. It would most affect demand from high-risk buyers who are highly leveraged, he said.

‘These measures will help to soak up the liquidity in the market as those who could previously afford three similarly priced homes, fully leveraged… would now be able to afford only two, lessening demand by a third,’ he added.

However, owners who are just selling their home to buy another need to get their timing right and ensure the first mortgage is fully paid before taking out a new loan.

If not, they will be allowed to take out only a 70 per cent loan for the new home and would have to pay the remaining 30 per cent upfront.

Source: Straits Times, 31 Aug 2010

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S$6 Million Maid SINGAPORE

Skooter reports JULY/22/2010

SINGAPORE—“I am the luckiest maid in Singapore, with or without the money,” the 47-year-old single woman—identified only by the pseudonym “Christine”—told the Straits Times in an interview.

“Christine” a devoted Filipino maid inherited S$6 million (around P202 million) from her late employer after more than 20 years of service, a newspaper report said on Wednesday.

“Christine” arrived in Singapore in 1986. She refused to be named in public for fear of possible threats to her life particularly in the Philippines

The windfall inheritance includes cash and a luxury apartment near the Orchard Road shopping belt, came from the estate of her employer Quek Kai Miew, a medical doctor and philanthropist who died last year at 66.

The maid, who is now applying for permanent residency in Singapore, said her newfound wealth had not changed her lifestyle.

Nearly 200,000 foreign maids, mostly from the Philippines and Indonesia, work in affluent Singapore, which has a population of 5 million.

Source: Agence France-Presse/Inquirer.net

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S$6 Million Maid SINGAPORE

Skooter reports JULY/22/2010

SINGAPORE—“I am the luckiest maid in Singapore, with or without the money,” the 47-year-old single woman—identified only by the pseudonym “Christine”—told the Straits Times in an interview.

“Christine” a devoted Filipino maid inherited S$6 million (around P202 million) from her late employer after more than 20 years of service, a newspaper report said on Wednesday.

“Christine” arrived in Singapore in 1986. She refused to be named in public for fear of possible threats to her life particularly in the Philippines

The windfall inheritance includes cash and a luxury apartment near the Orchard Road shopping belt, came from the estate of her employer Quek Kai Miew, a medical doctor and philanthropist who died last year at 66.

The maid, who is now applying for permanent residency in Singapore, said her newfound wealth had not changed her lifestyle.

Nearly 200,000 foreign maids, mostly from the Philippines and Indonesia, work in affluent Singapore, which has a population of 5 million.

Source: Agence France-Presse/Inquirer.net

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H E A R D :

Property Speculators

nO mOre gOOd OppOrtUnItIes In prOpertIes

swItchIng targEts

nO gOOd prOspectIve chOIces Other than

GENTING TWINS ?

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Real-time: 1:16PM EDT

INDEXDJX real-time data - Disclaimer

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M’sia refrains from rate hike as rebound cools

KUALA LUMPUR

Bank Negara Malaysia kept its benchmark overnight policy rate at 2.75 per cent, a decision that was predicted by the majority of economists surveyed by

Malaysia started raising interest rates before any other Asian central bank this year to reduce what officials said was the risk of financial imbalances caused by keeping borrowing costs too low for too longregion’s efforts to withdraw monetary stimulus introduced to counter last year’s global recession may slow as policymakers around the world take steps to shore up growth amid signs their economies are cooling.. The

Bank Negara’s decision to stand pat came amid government data yesterday showing Malaysia’s exports rose at the slowest pace in eight months in July, as weakening growth in the world’s largest economies damp demand for goods.

Overseas shipments climbed 13.5 per cent in July from a year earlier to 55.4 billion ringgit ($23.9 billion) after gaining 17.2 per cent in June. The export increase was led by higher shipments of electrical and electronics goods and commodities such as liquefied natural gas, refined petroleum products, palm oil and rubber.

Weaker-than-estimated growth in Japan and slowing expansion in the US and China, among Malaysia’s biggest markets, pose a threat to demand for Asian goods.

The country’s imports rose 18.1 per cent in July to 48.4 billion ringgit from a year earlier. The trade surplus widened to 7.01 billion ringgit from 6.04 billion ringgit in June. — Malaysia’s central bank yesterday left interest rates unchanged after three consecutive increases, in a move to support growth as the global recovery slows.Bloomberg. Others expected a quarter-point increase.Bloomberg

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Woman sues electronics firm for loss of hearing

Leong Wee Keat

weekeat@mediacorp.com.sg

SINGAPORE

“I felt like needles were piercing my ear,” Mdm Lee told MediaCorp, recalling the incident on March 9. She says that she ran back to the M1 outlet where she cried due to the “sharp pain” in her ear.

Mdm Lee was then taken to a clinic and later went to the Singapore General Hospital (SGH).

Over several visits to SGH, the assessment of the alleged impact on her hearing in her left ear went from “mild/moderate” on March 15 to “profound” on April 26. The most recent diagnosis — on Aug 18 — said Mdm Lee’s loss of hearing in her left ear was “total and irrecoverable”.

Mdm Lee is suing electronics firm Samsung Asia over the alleged incident for “severe injury” purportedly caused by the mobile phone.

The electronics giant has denied the claim in its defence, which has been filed.

In response to MediaCorp’s queries, Samsung said it was deeply concerned about the situation and was ready to “provide any assistance if contacted by the authorities”.

The company said it has engaged Mdm Lee on various occasions to understand any issues she might have had with the mobile phone.

A company spokesman said: “Samsung has also conducted an independent investigation and has not found any issues related to her E1310.

Samsung adheres to strict quality control protocols and complies with the standards of the regulatory authorities in any market it operates in.”

In its defence, Samsung — represented by Attorneys Inc lawyer Axel Chan — argues that Mdm Lee was negligent by using the mobile phone without following instructions, failing to ensure that the volume was set at a safe level and for not ensuring the mobile phone was working properly.

Mdm Lee’s lawyer, S Selvaraj, from MyintSoe & Selvaraj, claims that Samsung, as the distributor of mobile phones bearing its trade name, had failed to ensure the mobile phone was safe for use before supplying it to the retailer for sale. A pre-trial conference has been set for Sept 15.— Less than 15 minutes after buying a new mobile phone from an M1 outlet in Plaza Singapura, Madam Lee Sek Foi turned it on and called her husband. But instead of hearing his voice, the 50-year-old cook claims that she heard a sharp, piercing sound in her left ear.

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I would never have entered into the deal if it meant giving up my private property.

Denise, a private home owner who exercised her option to buy an HDB flat but is now caught by the new rules.

pharoah88 ( Date: 04-Sep-2010 00:35) Posted:

Some private property owners in a bind

Those who exercised options for HDB flats in a quandary over new dual home ownership rules

JOA NNE CHAN

joannechan@mediacorp.com.sg

SINGAPORE

Since Aug 30, private property owners who want to buy an HDB flat would have to sell their private property within six months.

Those who own foreign private property will also not be exempted from the rule.

Denise (not her real name), 42, was in the process of buying a three-room resale flat to live in, so that her District 11 condominium unit could be rented out.

The single mother of two had exercised her option to purchase the flat on Aug 8 by paying a $4,000 deposit, on top of a $1,000 option fee paid earlier.

A bank loan was secured on Aug 18 but Denise said they managed to get the seller’s signature only on Aug 28.

They were planning to submit the application on Aug 30.

Denise said she would never have entered into the deal if it meant giving up her private property.

Denise is not alone. PropNex chief executive officer Mohd Ismail said his agents had received more than 10 enquiries since Monday from home owners caught in a similar situation.

In Denise’s case, by exercising the option to purchase, she had entered into a binding legal contract and could be sued for damages should she back out of the deal, said Mr Chris Koh, director at Dennis Wee Group (DWG).

This means that she is liable for any shortfall that the seller incurs if the flat is sold to another buyer at a lower price.

Mr Ismail said those with proof of documentation signed prior to Monday could try to appeal to the HDB.

“HDB will judge the merit of each individual case and there is a high chance those people will be cleared to proceed with their purchase,” he said. DWG’s Mr Koh said he would advise home buyers caught in this situation to talk to their sellers and banks and negotiate a new deal — perhaps pay a percentage of the liable damages to avoid a legal suit.

If that falls through, the buyer can then try to appeal to the HDB, but only if there’s proof that documents — such as the Option to Purchase between buyer and seller, or a Letter of Offer from the bank — were signed before Aug 30.

The HDB has said it will look at each appeal on a case-by-case basis.— The recent changes to dual home ownership — aimed at cooling the sizzling property market — have left some owners in a bind.