Private home prices fall for the fourth straight quarter, according to recent URA data.
PropNex predicts price decline in the private residential market will persist due to weak demand caused by various factors, such as the total debt servicing ratio (TDSR) and additional buyer’s stamp duty (ABSD) working in tandem to curb exuberant home buying.
Additionally, HDB prices are also affecting the private property market.
“HDB resale flat prices have further softened, thus reducing the motivation for HDB owners to upgrade to mass market private properties as their purchasing power have been affected (HDB resale prices fell 1.7 per cent in Q3 2014) – due to a mix of abundant incoming supply, continued enforcement of cooling measures and public housing regulations such as the tighter Mortgage Servicing Ratio (MSR) on HDB loans,” PropNex said in a report on real estate data trends.
PropNex’s Chief Executive Mohammed Ismail Gafoor said, “With TDSR being a long-term instrument, and together with the ABSD, it will continue dampen any speculative activity. Under such an environment, we expect price weakness to persist into 2015, unless the government tweaks some of its cooling measures.”
Home prices across all regions are expected to fall further. However, reasonably-priced homes with desirable features and location attributes will continue to be favourable with homebuyers.
Photo by Nikki De Guzman
Muneerah Bee, Senior Journalist at PropertyGuru, wrote this story. To contact her about this or other stories email muneerah@propertyguru.com.sg
