Buyers shift to smaller homes

The latest changes to the Total Debt Servicing Ratio (TDSR) by the Monetary Authority of Singapore (MAS) will see home buyers turning to smaller units to offset price hikes. The move is also expected to affect volume demand, particularly coming from buyers with higher incomes, according to DBS.

“Based on the URA statistics, 5MTD monthly primary private home sales ex-ECs have dipped 23 percent year-on-year to 8,353 units,” DBS said.

As data is in line with the bank’s estimates, DBS maintains it current projection – a 20 percent decline in volume demand for 2013, with prices stable at -five percent year-on-year.

“A look at primary transactions also showed that buyers have been moving towards small units to offset price increases. Average unit sizes have shrunk 16 percent since 2010 to an average of 961 sq ft per unit in 5M13 while price psf have continued to trickle up marginally.”

DBS expects the trend towards smaller unit sizes to continue, “particularly after this move by MAS”.

Source – PropertyGuru – 11 Jul 2013


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