Widening gap between home prices

The landscape of Singapore’s property market is changing, with price cuts at new suburban projects, while new sale prices for more central homes have been more stable.

This has led to a growing price gap between downtown projects and those in other parts of Singapore.

The price gap narrowed most in 2013, when the private home market peaked, before the Total Debt Servicing Relation (TDSR) arrived. But with TDSR putting demand on potential buyers – specifically those of significantly less central plans – the gap may well grow also wider.

Inside new sale market, price tag gaps amongst non-landed homes in the main central spot (CCR) and rest of central region (RCR), and those inside CCR and out of doors central spot (OCR), bottomed out in 2013.

At the time, normal CCR innovative sale non-landed home price ranges slumped by means of 9. some per cent, while prices went up by 3. three or more per cent inside RCR and surged 13. 3 % in the OCR.

That season, average innovative sale rental prices inside CCR had been at a good five-year low of $1, 919 psf, thanks to D’Leedon, with 699 units displayed an average of $1, 481 psf, and Duet Residences, with 518 sections sold at typically $1, 989 psf.

But since average innovative sale price ranges of CCR non-landed homes shot up 12. 5 % in 2014, the price insurance of CCR over OCR condos went up by from 67. 8 % to 83. 2 %. This was to a certain extent due to solid sales for Marina Just one Residences, with 290 sections sold at typically $2, two hundred fifity psf.

The premium of CCR through OCR innovative non-landed homes was over 80 per cent not too long ago.

Singaporean potential buyers of prime properties in the CCR tend to be more affluent and less affected by measures such as TDSR and Additional Buyer’s Stamp Duty (ABSD).

In contrast, buyers of OCR and RCR properties are more price sensitive. Such buyers are usually bargain hunting. The ability to take up loans is critical for their purchase decision, but many are hampered by the TDSR, and the situation can be compounded by means of ABSD.

Therefore, OCR price ranges have sticked competitive, to learn frequent price tag cuts to be able to units.

As outlined by caveats, units at The Panorama in Ang Mo Kio went for a median of $1, 213 psf in the first quarter, or 9. 7 per cent lower than when it was launched. Units at The Trilinq in Clementi went for $1, 408 psf in the first quarter, 8. 9 per cent lower than when it was launched.

In contrast, prices have been more stable for CCR projects. Units at Robin Residences in Bukit Timah went for $2, 371 psf in the first quarter, or 2 . 4 per cent higher than the quarter it was launched.

But the new sale market price correction seems to be tapering off. New sale prices are a factor of land prices; those who bought land at a relatively high level will still keep prices at a certain level.

In the resale market, the price gap between CCR and OCR non-landed properties was at a five-year low of 90. 1 per cent in 2014, and rose to 94. 1 per cent last year.

Owners of CCR properties typically have stronger holding power compared with those of OCR properties, experts said. The completion of many OCR projects these few years could mean more secondary market source as well.

Merchants also experience competition out of developers who all are establishing projects for attractive price ranges. The price hole in the second-hand market really should widen, reported a therapist.