The introduction of the Total Debt Servicing Ratio (TDSR) in June 2013 contributed to fewer transactions in the primary market, with sales volume and developers’ launches falling by 50 and 52 percent respectively in 2014, according to property agency PropNex and reported in the media.
While prices generally fell in all segments in 2014, “prices for property in the Outside Central Region (OCR) remained the most resilient of the lot – registering only a 2.2 percent decline compared to a 4.3 percent and 5.5 percent drop in the Core Central Region (CCR) and Rest of Central Region (RCR) respectively”, said PropNex CEO Mohamed Ismail.
This could be due to the OCR segment being well-supported by first-time home buyers and upgraders.
Considered the suburbs of Singapore, the OCR includes densely populated estates such as Sengkang, Punggol, Woodlands, Yishun, Tampines, Bedok and Jurong – where a variety of mass market condos are situated.
The cumulative effects of the property cooling measures, particularly the TDSR, resulted in buyers becoming more quantum sensitive, benefitting “projects in outlying regions – where the overall quantum is more affordable compared to the central region”, shared Ismail.
He noted that ongoing housing loan curbs limited the amount of debt buyers can take, making properties priced between $800,000 and $1.2 million more sought after.
“For foreigners, the Additional Buyer’s Stamp Duty (ABSD) will continue to be a stumbling block in their consideration for a purchase. As such, they will also look to more ‘budget friendly’ alternatives in the OCR,” he explained.
Aside from the lower price quantum, mass market properties are also “becoming more appealing due to the government’s decentralisation strategy to sustain Singapore’s growth by developing regional centres at various parts of the island including the West and North regions”.
And given the number of new launches planned for this year but fewer foreign buyers entering the market, PropNex believes the only properties that will remain popular in 2015 are mass-market homes situated near MRT stations, shopping malls and schools, like the upcoming North Park Residences, an integrated project in Yishun “which we expect to achieve a strong take-up rate”, added Ismail.
Romesh Navaratnarajah, Singapore Editor at PropertyGuru, edited this story. To contact him about this or other stories email romesh@propertyguru.com.sg
