Condos below $1.25mil preferred
The majority of new private home sales in the non-landed segment in H1 2014 were priced below $1.25 million, according to a study by CBRE.
Specifically, properties in this price band accounted for 71.7 percent of the transactions during the said period compared to 63.6 percent for the whole of 2013. Residences within this range also made up the lions share of sales since 2007 despite inflation and rising wages.
Our study of caveats lodged for non-landed new sales from 2007 to H1 2014 showed that 55 to 75 percent of transactions were priced below $1.25 million each. In particular, the most popular price band was from $750,000 to $1 million, said CBRE Research Head Desmond Sim.
Based on the buyers addresses, HDB dwellers made up 52 to 67 percent of the transactions for units sold under $1.25 million since 2008.
They could be HDB upgraders, or singles and new couples looking for their first homes. The Total Debt Servicing Ratio (TDSR) framework has just closed the lid tighter on liquidity and made it that much harder for HDB upgraders to buy a private property, much less new couples aspiring to join the fray by bypassing the HDB route, Sim explained.
Additionally, the proportion of HDB occupiers, who bought new private non-landed houses costing less than $1.25 million, reached a record high of 66.7 percent in H1 2014. However, the number of such buyers declined to 1,696 over the period from 1,967 in H2 2013 and 3,385 for H1 2013.
The number of units within this price band that were purchased by those with private addresses also declined to 847 in H1 2014 versus 1,459 and 2,248 in the first and second halves of 2013, respectively.
This implies both groups of buyers were significantly affected by the TDSR, which was imposed in June 2013.
Muneerah Bee, Senior Journalist at PropertyGuru, edited this story. To contact her about this or other stories emailmuneerah@propertyguru.com.sg
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