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Buyers shift to smaller homes

Posted on 11 Jul 2013 | Comments Off

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

Tagged MAs, Monetary Authority of Singapore, Singapore Property Market, TDSR, Total Debt Servicing Ratio

COV falls to lowest in about a year

Posted on 5 Jul 2013 | Comments Off

The overall cash premium or Cash-Over-Valuation (COV) for HDB resale flats has fallen to its lowest in about a year.

This is according to flash estimates by the Singapore Real Estate Exchange (SRX).

The overall median COV fell by 15.2 per cent in the second quarter of the year to S$28,000, down from S$33,000 in the first quarter.

The previous low was S$26,000 in the second quarter of 2012.

Meanwhile HDB resale transactions fell by 31 per cent in the first half of this year compared with the same period in 2012.

A total of 7,555 flats were transacted in the first half of 2013.

ERA Realty Network’s key executive officer, Eugene Lim, said: “The June COV was $24,000. It has trended downwards. We are likely to see COV continue to trend downwards and quite possibly by the last quarter, we could see COVs around the $20,000 region.

“When it hits the $20,000 region, I think we may see more buyers entering the market, because it’s a figure that’s generally acceptable to buyers.

“(So we could have more buyers entering the market) instead of them wanting to wait three years for a HDB BTO (flat).”

On the private housing front, transactions for non-landed private resale units fell by 42 per cent in the second quarter, compared with the same period one year ago.

But the 2,024 units moved in the second quarter of this year were slightly higher than in the first quarter.

In the month of June, resale prices of non-landed private residential units showed an overall increase of 1.8 per cent, according to flash SRX estimates.

Source – CNA – 5 Jul 2013