MUTED HOME SALES TO CONTINUE, SAY ANALYSTS
Sep 17, 2013
Home buying demand is expected to remain sluggish in September due to the Total Debt Servicing Ratio (TDSR) rule implemented on 29 June that affects all property loans, several consultants said.
They do not expect developers' sales volume to exceed 800 units this month, a sharp contrast to the 1,806 new private housing units transacted in June, which excluded executive condominiums (ECs).
Since then, sales at new launches dived 73 percent to just 481 units in July but picked up to hit 742 homes last month on the back of a more than 200 percent month-on-month increase in projects released.
"Not only are banks taking a longer time to evaluate and approve loan applications, some home buyers are expected to be priced out of the market, while others will need to re-evaluate their ability to afford," said Chia Siew Chuin, Director of Research & Advisory at Colliers International.
According to Mohd Ismail, CEO of PropNex, home buyers will continue to remain cautious and be more selective with projects. He believes many buyers will look to sort out their finances and work within the TDSR limits.
Meanwhile, developers are likely to adapt their marketing tactics in a bid to move units.
"They could turn more aggressive and many could modify project sales strategies - given that the tried-and-tested sales incentives/schemes to attract buyers, including vouchers, discounts and rental guarantees, among others, are likely to be less effective after the implementation of the TDSR. There could also be some price tweaks by developers to support project sales," noted Chia.
Looking ahead, experts feel the current trend of slower sales will continue until end-2013.
Alice Tan, Research Head at Knight Frank, said: "(The) new sales volume of private homes for this year could fall in the range of between 14,500 and 16,000 units, which is around 30 percent lower than the record high of 22,197 units last year."
Info courtesy- PropertyGuru.com.sg
