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Slow property market growth due to TDSR

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The Total Debt Servicing Ratio (TDSR) framework’s limitation on car and home loans has been cited as being responsible for the sluggish private housing market, according to market observers who spoke with Channel NewsAsia.

The TDSR, which was implemented on 29 June 2013 to curb debt payments, is said to have brought about the drop in units sold from 14,938 in 2013 to 7,316 private homes sold in 2014.

With the TDSR expected to be implemented permanently, and with the private property market appearing to moderate, market watchers have urged the government to relax policies such as the Additional Buyer’s Stamp Duty (ABSD).

ABSD is meant to prevent local buyers from purchasing another home and restrict foreign buyers from entering the market.

In an interview with Channel NewsAsia, Mr. Ismail Gafoor, Chief Executive of PropNext Realty, said that there is existing demand, however buyers are hesitant due to cooling measures.

Because of buyers on a budget, developers have also been careful with their launches.

A declining number of project sales have been observed since June 2013, from 15 (June 2013) to seven (June 2014) to three this June.

PropNext Realty noted that this might pressure weaker developers to quit.

In an interview with Channel NewsAsia, Ms Chia Siew-Chuin, Research & Advisory Director at Colliers International said, "Most developers here in Singapore would have accumulated quite a bit of profits during the early years of the recent residential property boom and that has actually given them the capacity and holding power to ride out these subdued market conditions”. However she also noted that those unable to endure the weak property market may eventually leave.

Taken from iProperty

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Guest Monday, 13 July 2020