While the government will continue to help Singaporeans own homes and have put measures in place to protect first-time buyers from a hot housing market, “they must have a realistic pathway to achieving their aspirations”, said Home Affairs and Law Minister K. Shanmugam.
During a dialogue session with over 2,000 property agents from ERA Realty on Wednesday (3 Jan), the minister recalled how a 28-year-old President’s Scholar had lamented to him about not being able to afford a private property in Katong, despite his many achievements.
“These are unrealistic aspirations for someone who’s only in his 20s,” said the minister. He noted that Singaporeans can afford to purchase property based on income levels, and have the option of buying private property, “but they need to start somewhere”, he said in reference to those eager to move up the property ladder.
Properties in Tanjong Katong are generally more expensive compared to other areas in the East, due to their prime location and accessibility to good amenities.
One of the more recent project launches in the neighbourhood is Amber Skye, a 109-unit condominium which was relaunched in March 2015 at an indicative price range of $1,680 psf to $2,500 psf.
Owning a condominium in Singapore is seen as a dream among many Singaporeans, as it is one of the 5Cs, with the other aspirations being a car, country club membership, cash and credit cards.
Despite this, Eugene Lim, Key Executive Officer at ERA Realty, has observed that fewer HDB dwellers are now jumping straight into buying private property.
Instead, he is now seeing a trend of a “fair amount of buyers upgrading to larger flat types since the second half of last year”. For instance, there are more four-room HDB flat owners shifting to five-room flats and executive flats.
“The trend of moving to larger private properties is constrained by the Total Debt Servicing Ratio (TDSR),” he said.
Introduced in June 2013, the TDSR limits the amount of a borrower’s gross monthly income that can be spent on debt repayments to 60 percent.
This has severely impacted private property sales in recent years, with transactions down to about 14,000 units in 2015 compared to around 38,000 in 2012 before the measure was introduced, revealed statistics from the Urban Redevelopment Authority (URA).