Seven in 10 new private condos sold in H1 at under S$1.25 m
http://www.businesstimes.com.sg/real...t-under-s125-m
Seven in 10 new private condos sold in H1 at under S$1.25 m
By Kalpana Rashiwala
[email protected]@KalpanaBT
15 Oct
A STUDY by CBRE has showed that 71.7 per cent of new sales of private apartments and condos in the first half of this year had price tags of below S$1.25 million each. This is higher than the 63.6 per cent share recorded for the whole of last year.
The property consultancy group observed that even with a longer-range view - looking at figures since 2007, despite rising wages and inflation - this sweet spot of consumers has stayed largely unchanged.
CBRE research head Desmond Sim said: "Our study of caveats lodged for non-landed new sales from 2007 to H1 2014 showed that 55 to 75 per cent of transactions were priced below S$1.25 million each. In particular, the most popular price band was from S$750,000 to S$1 million over this period."
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Looking at the addresses of buyers of new sale units with price tags below S$1.25 million, CBRE noted that, since 2008, 52 to 67 per cent of them have been HDB occupiers.
"They could be HDB upgraders, or singles and new couples looking for their first homes. The TDSR (total debt servicing ratio) 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," Mr Sim said.
Although the proportion of HDB dwellers among buyers of new non-landed private homes below S$1.25 million was at a high of 66.7 per cent in H1 2014, the absolute number of such buyers was only 1,696 in the first six months of this year; this is lower than the 1,967 figure for H2 2013 and 3,385 for H1 2013.
The number of units below S$1.25 million picked up by those with private addresses also fell markedly to 847 in H1 2014, from 1,459 in H2 2013 and 2,248 in H1 2013.
This reflects the across-the-board drop in property transaction volumes following the introduction of the TDSR framework in late June 2013.
DTZ SEA chief operating officer Ong Choon Fah said that a large portion of HDB dwellers buying private homes are likely doing so for owner occupation.
She acknowledged that some of these upgraders would be moving into smaller private housing units. "They may be downsizing, but psychologically, they feel they have arrived because they have upgraded to join the 20 per cent of households here living in private homes.
"Moving to a private condo allows you to pamper yourself with club-style facilities just a door-step away. This is especially appealing to those with kids."
She pointed out that the design of condo projects has changed to include a higher proportion of small units. "Developers now offer more amenities and spaces for entertaining - not just at the clubhouse and poolside but sky gardens for instance - to cater to residents in small units who wish to entertain guests outside their units."
