Total Debt Servicing Ratio. Or Total Damage to Singapore Residential as some industry players would put it?
The real estate sector is in a little bit of a sway at the moment. With the situation tilting this way then the other every other month, the outlook is clearly unclear. The latest loan curbs seem to be taking its toll on the property market, with a reported 73 per cent drop in sales in July, following an already considerable drop of 65 per cent in June.
Not surprising at all since the immediate effect is that it is not as easy as before to borrow. Loan approval times have lengthened and loan amounts are restricted. Although sales are still happening, buyers are no longer able to commit to purchase as quickly as before. Unlike January’s measure which increased the Additional Buyer’s Stamp Duty (ABSD) percentage, developers are unable or have yet to find ways to soften the blow for their buyers.
But despite the sudden plunge in new home sales, industry experts are not worrying excessively over the numbers as it may be too early yet to tell if the effects will stick. With this month being the Hungry Ghost month, they are not expecting a sudden lift in sales. They are hoping to see a strong rebound in October when new properties will be launched once more.
And as home prices continue to rise, response from the market in the upcoming months may also be a good indicator of how resilient the market is and whether the pool of buyers and renters will continue to grow.