The Total Debt Service Ratio (TDSR) framework, which takes into account all loan obligations, has successfully brought sales volume and cooling prices down.
According to Desmond Sim, Head of CBRE Research in South East Asia, the latest URA figures released show current price levels of Singapore properties are now similar to levels recorded in H2 2011, just before the first set of Additional Buyers’ Stamp Duty (ABSD) was imposed.
“The one percent quarterly fall is not unexpected; it demonstrates once again what previous quarters have shown – that the TDSR framework has clearly achieved what it set out to do in the private property market. Where it previously impacted volume, having halved sales volume to 7,500 units from the 14,948 units sold in 2013, the TDSR framework has now begun to make its mark on prices.”
He added market watchers are now largely in agreement that the TDSR framework has served its purpose in bringing down sales volume and cooling prices and at the same time ensuring the gearing health of the market. This also means homebuyers who can afford homes have stronger financial muscle and should be able to weather any rise in interest rates in the near future.
The current market sentiment is expected to prevail in 2015, Sim added. “Developers will monitor the market closely and price units at affordable levels, applying the same approach they have used for the past few quarters.”
CBRE expects new homes sales volume to reach a stable level at around 7,500 to 8,000 units in 2015, and prices are likely to come under pressure but remain stable.
Muneerah Bee, Senior Journalist at PropertyGuru, wrote this story. To contact her about this or other stories email muneerah@propertyguru.com.sg
