Buyers shift focus to shoebox units: DTZ Buyers are being drawn to more affordable and smaller units following the government’s latest property cooling measures and stricter loan rules, according to a report from DTZ. During the second quarter, 2,571 buyers (38 percent) opted to buy homes below S$1 million, higher than the 1,835 buyers (31 percent) in the previous quarter. Purchases between S$1 million to S$1.5 million also increased to 33 percent or 2,265 units in Q2. In contrast, sales of homes prices from S$1.5 million to S$2 million fell to just 12 percent in Q2, while purchases between S$2 million to S$3 million slipped to nine percent. “The sharp increase in purchases of units costing below S$1 million was largely due to the sale of shoebox units (defined as units below 500 sq ft in size) within this price band. The proportion of shoebox unit purchases within this price band rose from 17 percent in Q1 to 29 percent in Q2. In absolute terms, the number of units more than doubled from 310 units in Q1 to 738 units in Q2. Almost all of the shoebox units purchased in Q2 cost less than S$1 million,” the report said. Of the shoebox apartments sold, 52 percent or 384 units are located in the Outside Central Region (OCR). The popular projects include Bartley Ridge, D’Nest and Urban Vista. Moreover, Q2 also saw a 22 percent quarter-on-quarter increase in purchases by HDB addressees mostly buying shoebox units. In the high-end segment, sales remained firm as “buyers have deep pockets and are less affected by the cooling measures”. In fact, 40 units worth over S$10 million were sold in Q2, up 33 percent from Q1. Moving forward, DTZ expects MAS’ new Total Debt Servicing Ratio (TDSR) framework “to have limited impact on purchase demand for the first and second private residential property, although the maximum quantum of the property they can now purchase is reduced”. The TDSR will also likely affect investment demand especially for the third property onwards as transactions will take longer to be completed. “With the maximum absolute quantum of loan being reduced, we expect demand to continue to gravitate towards smaller and more affordable units,” it added. Source : PropertyGuru – 27 Aug 2013
Posted on: Fri, 30 Aug 2013 05:59:57 +0000
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