Though the dip in private home sales is not as drastic as expected, with a 1.3 per cent decline in the first half of 2014, industry experts are expecting the same rate of decline for the remaining half of the year.
The restrictive home loan situation was the main deterrent as it has meant that buyers may no longer be able to loan as much as before and that has limited their possible property purchases. The Total Debt Servicing Ratio (TDSR) limits the total monthly debt repayment to 60 per cent of the borrower’s gross monthly income. For buyers who are already servicing a home loan or other loans, the amount they are able to loan will be lesser as well.
The smaller and more affordable units will seem more attractive than before. Or units such as dual-key apartments which allow bigger families to stay together may be more affordable should the cost be shared. As June was a relatively quiet month for new launches, figures from the next quarter will be more telling. In the first half, less than 5, 000 private homes were sold. Buyers can look forward to a few more launches in the coming months, including mixed-use development, City Gate at Beach road, The Crest in Prince Charles Crescent, Highline Residences in Tiong Bahru and Marina One in Marina Bay. Indicative prices of units at City Gate will range from $1, 900 to $2, 200 psf.
Will there be a surprise market rebound? Or will it decline further?