Although developers successfully sold 1,806 new private homes excluding executive condominiums (ECs) in the traditionally quiet month of June, the spike in primary sales is not expected to continue moving forward, according to PropNex Realty.
“June’s numbers indicated an exceptional performance especially with the quieter period during the June school holidays as people travel and are away,” said Mohamed Ismail, CEO of PropNex.
But home buyers are expected to be more cautious as affordability levels have been hit by the Monetary Authority of Singapore’s (MAS) new debt servicing framework.
“It is a reasonable one in the current economic environment of low interest rates as this could prove calamitous if interest rates rose or if an economic downturn upset a family’s overall financial calculations. By encouraging borrowers to be prudent – the new rules will contribute to financial stability in the long run,” Ismail noted.
Therefore, the sales volume would moderate this month especially with the implementation of TDSR.
“This tougher new rule on property financing is not likely to affect the private property prices as developers are not prepared to bring down prices immediately. I believe many potential buyers will likely adopt a wait-and-see attitude first before making a purchase decision. Also, developers are likely to be cautious in their pricing strategy to avoid hitting buyers’ price resistance level,” added Ismail.
Around 18,000 to 19,000 units are expected to be sold this year, with the higher end of the figure being reached if GDP growth remains strong.
Source – PropertyGuru – 16 Jul 2013