No buying frenzy despite easing of property cooling measures

DBS expects the recent hike in development charge (DC) rates for condominiums to affect developers’ profitability as breakeven prices may increase by up to four percent...

Sales at some new launches in Singapore continue to move slowly despite the recent tweaking of property curbs.

The easing of some property cooling measures last week has not propelled demand for private homes, reported the Straits Times.

Property agents noted that there was no buying frenzy at most showflats, where it was business as usual.

“It probably got people more interested to look around for units, but there was no sharp spike in sales. I don’t think the changes to the measures were designed to do that,” said Dominic Lee, Branch District Director at PropNex Realty.

Sales at The Clement Canopy in Clementi as well as Grandeur Park Residences in Tanah Merah continued to move slowly following their first weekend launch, with only 10 and 23 units sold respectively over the weekend.

This indicates that the government’s decision to ease property curbs had relatively little effect on new home sales.

The government reduced the Seller’s Stamp Duty (SSD) holding period for homes purchased from 11 March 2017 from four to three years, and lowered the rates for each tier by four percentage points.

It also waived the Total Debt Servicing Ratio (TDSR) framework on mortgage equity withdrawal loans with loan-to-value (LTV) ratios of 50 percent and below.

However, Desmond Sim, CBRE’s Head of Research for Singapore and South East Asia, noted that “most of the TDSR is still in place, as are the Additional Buyer’s Stamp Duty and the LTV limits”.

“These are the ones that will impact buying decisions,” he said.

He added that buyers may also be taking a cautious approach in light of the potential hike in US interest rates, which could result in higher rates here and suppress investor demand for homes.

Nonetheless, it may also encourage fence-sitters on the lookout for a unit to live in to get the deal done sooner than later.

 

Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories, email romesh@propertyguru.com.sg