Effect of home loan curbs wearing off
BUYERS could be growing used to the more rigorous home loan rules put in place last year, and buying might be set to improve, going by the latest numbers on private home sales.
They increased by 55 per cent from 480 in March to 745 last month, according to Urban Redevelopment Authority (URA) figures released yesterday.
The rebound comes after the market took a beating with the introduction of the Total Debt Servicing Ratio (TDSR) framework in June last year.
"People are getting used to the TDSR, since it is probably here to stay, and they are improving their financial portfolio to manage the TDSR," said Thomas Tan, director of property agency Remax.
The TDSR restricts banks from approving a home loan if the applicant's monthly debt obligations, including other mortgages and car loans, exceed 60 per cent of his gross monthly income.
Propnex chief executive Mohd Ismail pointed to the the same factors in his assessment of the market.
Now that the TDSR has been in play for 10 months, the dust has settled somewhat, he said.
"We expect new-sales volume to improve in the coming months, on the back of more new launches and fairly positive market interest," Mr Ismail added.
At Lakeville in Jurong, 210 out of 230 units were snapped up at a median price of $1,318 per sq ft (psf) - which made it the best-selling project for the month.
The next best-selling project was the recently re-launched Sky Habitat, where 130 units were sold at a median price of $1,377 psf.
When the Bishan condominium was first launched in 2012, units achieved a median selling price of $1,583 psf.
"The developer's strategy of reducing prices has obviously succeeded in regaining the attention of buyers. The Sky Habitat story is a clear example that it is now a buyer's market," said SLP International research head Nicholas Mak.
The Sorrento, launched last month in West Coast, was also well-received, with 125 units taken.
"The competition between those pushing new developments is high as there are limited buyers and leftover stock is weighing on the market," said Eugene Lim, key executive officer at ERA.
He believes that as prices stabilise, more buyers will enter the new-sales market.