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DBS: July rush to buy S’pore property may boost mortgages

Private yachts berthed outside luxury condominium apartments at Sentosa Cove in Singapore, on Wednesday, 3rd February, 2010. Photographer: Munshi Ahmed/BloombergXXX Sentosa Cove/Marina Bay in Singapore, on Wednesday, Feb. 3, 2010. Singapore's luxury-home prices wonÕt match Hong Kong's because an increase in building ahead of two casino projects in the city-state will see nine times the number of new apartments going up over the next three years than in Hong Kong, according to real estate broker Savills Plc. Photographer: Munshi Ahmed/Bloomberg

By BLOOMBERG

SINGAPORE • DBS Group Holdings Ltd said the recent race to buy property ahead of the government’s latest price cooling measures may give a temporary boost to its mortgage business, but in the longer term, the market is likely to slow down.

The country’s largest bank expects “a slight ramp-up in mortgage financing requirements” in the next one or two months as a result of the July 5 rush to purchase apartments before the government measures took effect, according to Sim S Lim, DBS Singapore country head.

About 1,000 condominium units were sold that evening in the hours between the government’s announcement of a new property clampdown, and the midnight deadline when the curbs took effect, the Straits Times newspaper reported.

Singapore imposed higher stamp duties and tougher borrowing limits in a bid to cool speculative demand stoked by record land bids and redevelopment deals.

“These people who bought 1,000 units will be looking for mortgage financing,” Lim said yesterday in an interview.

After that demand has been satisfied, the mortgage market will cool, though discounts from property developers will mitigate the downturn, Lim said. The impact on DBS will also be cushioned by the nature of the bank’s customer base, which includes purchasers of government- subsidised housing and firsttime buyers, Lim added. Those purchasing first properties are exempted from the additional stamp duty.

DBS had S$73.5 billion (RM219.51 billion) of housing loans at end-March, up 14% from a year ago.