By Wong Siew Ying | POSTED: 13 Aug 2013 4:45 PM | CNA

SINGAPORE

Property analysts expect new private home sales in Singapore to likely plunge by some 63 percent in July.

And they say the sharp drop in sales volume is partly due to new property loan restrictions implemented on June 29.

Two projects – J-Gateway and Jewel@Buangkok – accounted for more than half of the 1,806 new homes sold in June.

But sales in July are expected to weaken considerably.

Based on preliminary figures from URA and SRX, property agency PropNex says just 664 units of new private homes, excluding Executive Condominiums, were sold last month.

PropNex adds that take-up rate was down across all segments – including homes in the city, city fringe and suburban areas.

And the reasons for the sharp drop are – a lack of major new launches and the Total Debt Servicing Ratio Framework (TDSR) introduced at end-June.

Industry players say previously a home buyer could walk into a showflat, get an in-principle approval for a housing loan and book a unit all in a day. But now, it could take 10 days or more to close a deal as a result of the lengthier loan application process.

Under the new rules, a loan applicant will have to provide details of all his or her debt obligations, including property and non-property loans to the bank.

With that in mind, some property agents say developers are changing the way they market their projects.

Mr Mohd Ismail, CEO of PropNex, said: “Prior to TDSR, the preview will be over the weekend or on a Friday, and then Saturday, Sunday the booking starts. Today, the norm is most developers open up their showflats for a preview, 10 to 14 days and during the preview most of the buyers walk in and select a unit with an expression of interest, and then get the bank to give an in-principle approval. And only after 10 to 14 days, the booking starts.”

Analysts say the slower loan approval process has unwittingly become a cooling period, and some buyers have backed out on getting a unit during that time.

Meanwhile, property agency OrangeTee says it’s seen a 20 percent drop in resale transactions for private homes in July.

Ms Christine Li, Head of Research and Consultancy at OrangeTee, said: “Usually agents took about four to six weeks to close deals, but because of TDSR, they are taking a bit longer, about eight weeks on average. This is partly because some of the buyers they are reassessing their affordability. Due to TDSR, they are not sure whether they still can get the loan quantum they previously wanted.”

Analysts say property sales in August could remain slow as it coincides with the Hungry Ghost Festival.

But demand could pick up in September as developers launch more projects.

The URA is expected to announce the new private home sales figures for July on August 15.

– CNA/de

http://www.channelnewsasia.com/news/business/singapore/new-private-home-sales/775296.html