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TDSR: Buyers are less affected

Posted on 21 May 2014 | Comments Off

Going by the latest private home sales figures — which rose 55 percent to 745 units in April — home buying is likely to improve as buyers get used to the more stringent home loan rules, said media reports.

According to Thomas Tan, Director of Remax, “People are getting used to the TDSR, since it is probably here to stay, and they are improving their financial portfolio to manage the TDSR.”

Introduced in June last year, the Total Debt Servicing Ratio (TDSR) framework requires banks to ensure that borrowers’ total monthly debt repayments, including car loans and other mortgages, do not exceed 60 percent of their gross monthly income.

Propnex Chief Executive Mohd Ismail believes the dust has somewhat settled, given that the TDSR has already been in play for ten months.

He said, “We expect new-sales volume to improve in the coming months, on the back of more new launches and fairly positive market interest.”

MCL Land’s Lakeville in Jurong and CapitaLand’s Sky Habitat in Bishan were among the best-selling projects last month.

Eugene Lim, Key Executive Officer at ERA believes there is high competition among developers pushing new projects, as there are limited buyers and leftover stock is weighing on the market.

However, he added more buyers will enter the new-sales market as prices stabilise.

Source: PropertyGuru

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Posted in Loan / Mortgage / Finance, Property Market / Real Estate

Tagged Singapore Property Market, TDSR, Total Debt Servicing Ratio

More developers may cut prices to push units

Posted on 16 May 2014 | Comments Off

Buoyed by discounts offered by developers, private homes sales rebounded 55 percent to 745 units in April, following a slowdown in March when only 480 units were sold, according to Urban Redevelopment Authority (URA) figures.

Media reports said that property developers in Singapore have seen disappointing sale launches recently and to improve sales, some developers relaunched units at significant discounts to their initial launch prices.

The discounted relaunch prices, along with the reasonably priced new launches, helped to attract price-sensitive buyers.

CapitaLand’s Sky Habitat, for instance, released 80 new units in April, but ended up selling 130 units at an average price of $1,377 psf, or a discount of 13 percent from its initial launch price of $1,583 psf two years ago.

Despite the current weak buying sentiment, analysts believe that April’s sales indicated an underlying demand, provided prices are attractive.

“The developer’s strategy to reduce prices has obviously succeeded in drawing back buyers’ attention. The Sky Habitat story is a clear example that it is now a buyer’s market,” said Nicholas Mak, Research Head at SLP International.

Property consultants noted that the good response to the repricing could also see other developers offering discounts. To lure buyers, discounts should be about 10 to 15 percent below previous prices, they said.

Moreover, pushing sales through discounts helps developers manage cash flow, which is needed to fund ongoing construction costs, said CBRE research head Desmond Sim.

Moving forward, OrangeTee’s head of research and consultancy Christine Li expects total sales in May to exceed 1,000 units for the first time in 2014.

However, other consultants warned that although price discounts may stimulate the market, home buyers still have to face loan restrictions, which is their biggest drawback.

Source : PropertyGuru – 16 May 2014