Developers unfazed by new ruling

KUALA LUMPUR: Most developers participating at the Star Property Fair 2010 are unfazed with the lower loan-to-value ratio imposed by Bank Negara early this month on buyers taking up a third loan on a new house as they believe the new ruling would not significantly impact their bottomline.

The decision to impose the new ruling is to cool down the property market and to curb speculations.

Effective from Nov 3, house buyers who have signed up for two mortgages and intend to apply for a third loan will only be eligible to get up to 70% financing of the value of the house.

The Haven Sdn Bhd personal assistant of principal Yeo Kong Meng said: As a medium to high-end developer, we have not found this new ruling to have impacted our sales so far.

We also don't think this cap on home financing will have a severe impact on our bottomline going forward.

He said many home buyers were already placing at least 20% deposit to book the company's properties, prior to the new ruling.

Yeoh also said 60% to 70% of the company's customers were housebuyers, while 30% bought property for investment. Many of our house buyers have high disposable incomes; paying a higher deposit for their new property is not an issue.

Event manager K.Kalai said the company's main property project The Haven in Ipoh would comprise of three-condo towers built next to a natural lake and had a total gross development value (GDV) of RM230mil.

Tower A is almost fully taken up and is priced at RM338 per sq ft. The price range of a unit starts from RM331,500 onwards, he said, adding that all three towers would be fully built by 2013.

Penang-based Ivory Properties Group Bhd project director Murly Manokaran said property sales had not been impacted at all by the new ruling.

We actually welcome the new ruling, he said, adding that it would ensure that banks had housebuyers who were less likely to default on their loan payments.

Sime Darby Property executive (property division) Rizal Affendy Abdul Latif concurred with the other developers that the new ruling had not impacted sales.

We have so far not experience a slow down in sales due to a higher deposit on a third house. Most housebuyers with an investment intention are prepared for a higher deposit, Rizal Affendy said, adding that Sime Darby's strong reputation on delivering quality homes might have helped ensure sales remained strong.

We are targeting sales of about RM50mil for this fair but it will include following up with enquiries after the fair, he said, adding that the bulk of the house buyers were likely to be first or second-time home buyers.

Plenitude Heights Sdn Bhd executive (sales and marketing) Kevin Ho also concurred that the new ruling should not significantly impact the company's sales.

The uptake of Plenitude Heights properties so far has been satisfactory despite the new ruling, he said.

Rimbunan Raya Sdn Bhd senior manager Moses Ooi Chong Seng said the company was a niche and high-end developer.

Our current project The Enclave, in Perak, is a gated exclusive boutique residential development comprising of 45 bungalows, of which there are only eight units left for sale with price tags ranging from RM1.5mil to RM3mil, Moses said, adding that sales were good despite the new ruling.

By The Star