Published 21 January 2011
The Straits Times
By Aaron Low
Investors made up big proportion of private home buyers last year
NEW figures out yesterday underline the significant proportion of private property buyers last year who were investors.
Data from the Credit Bureau of Singapore (CBS) shows that 41 per cent of people who took out private property loans were getting a second loan or in some cases, a third or even higher number of loans.
Still, despite government measures unveiled earlier this month aimed at curbing speculative investing, property analysts do not expect a big drop-off in investors this year. The market-cooling moves followed a 17.6 per cent jump in private home prices last year and record sales.
They mean that anyone with an existing loan may now borrow only up to 60 per cent of the property’s value, down from 70 per cent.
Other measures impose significantly higher stamp duty on sellers, of up to 16 per cent, and over a longer period after purchase of four years, up from three.
However, analysts suggest this 41 per cent of the private home-buying market will not evaporate overnight, as many cashed-up buyers do not necessarily need large loans.
PropNex chief executive Mohamed Ismail estimated that about 20 per cent of the market will be affected by the higher downpayment rule.
‘But it is unlikely that all of the investor group will be maxing out their loans; some may be taking small loans and therefore may not even need the full 60 per cent loan,’ he said.
The CBS figures, covering the period ended November last year, showed the other 59 per cent were those with no outstanding private property mortgages. CBS collects data from all major banks.
In 2009, the percentage of people with at least one mortgage taking up a loan was a slightly lower 39 per cent, while those without outstanding loans formed 61 per cent, the new figures show.
In total, 66,221 people took out property loans from January to November last year, up from 63,435 people in all of 2009.
Still, CBS said the number of borrowers may be overstated as it includes joint applicants for a loan – two or three people such as family members may be applying for one loan.
Analysts said this was the first time they have seen such data and it provides a deeper insight into the property market.
Property consultancy Cushman & Wakefield’s senior manager for research Ong Kah Seng said the figures point to an increase in the number of ‘investors, specu-vestors or even speculators’.
In fact, he believes the CBS numbers, may be under-estimating the number of investors in the market.
This is because the database does not keep track of whether borrowers have taken on HDB loans. Those who have would be recorded as having no outstanding loans, said analysts.
Colliers International director of research and advisory Tay Huey Ying said it is the heftier stamp duty that will chill the market. ‘The stamp duty will put off new property purchases and cream off the marginal buyers,’ she said. ‘As such, I think the measures will likely lead to a steep fall in both volumes and prices.’
CBS data also show 87 per cent of the loans taken out last year were less than $1 million, supporting the view that much of the property market was driven by the mass property sector, said analysts.
Jones Lang LaSalle’s head of research for South-east Asia, Dr Chua Yang Liang, said that many in this group were probably HDB upgraders, either looking for a new apartment to live in or buying a second property as an investment.