Residual demand, which is the absorption of unsold housing units after stripping off demand from new launch or re-launches, has remained relatively stable with marginal improvement particularly in recent months, according to JLL.
It said the effect of the Total Debt Servicing Ratio (TDSR) has kept conservative buyers on the sidelines, judging from the sales of previously launched units.
In the period before the policy implementation, residual demand achieved a monthly average of 532 units. Post-TDSR, this volume has fallen to just 187 units.
Dr Chua Yang Liang, Head of Research for South East Asia at JLL, said, “These buyers are not immediately affected by the marketing efforts associated with new project launches nor re-launches, and they reflect what can be described as the ‘underlying conservative’ residual demand for housing under the new financing framework.”
He added, “This demand has been improving steadily in the last three months, from 183 units in April 2014 to 245 units in July, suggesting that these conservative buyers have been moving in from the sidelines, absorbing these previously unsold stocks in the market as the ‘price is right’.”
In his opinion, as long as developers continue with their marketing efforts, such residual demand is likely to return to the market and may continue to grow albeit slowly, as they are very price sensitive.
Muneerah Bee, Senior Journalist at PropertyGuru, wrote this story. To contact her about this or other stories email muneerah@propertyguru.com.sg
