Primary sales volume for February pegged to hit 600-900 units
More projects underway post LNY lull period.
According to Colliers International, with developers expected to launch more projects after the Lunar New Year lull period, primary sales volume is expected to improve to the region of 600-900 units in February.
Notwithstanding the improvement in launch and sales volume in January, the subdued market performance shows that the market may be reaching a state of stability following the implementation of the Total Debt Servicing Ratio (TDSR) in 30 June 2013, cooling off from the exuberance seen in 2012 and 1H 2013.
Homebuyers, whose home-buying budgets have been affected by the mortgage restriction, are expected to remain price-sensitive and selective in their purchases.
Although well-located projects with reasonable pricing are expected to be well-received, buying decisions could be stalled on the back of downside risks and buyers’ tendency to hold back for price corrections.
Meanwhile, the review of the TDSR framework on 10 February 2014 will offer some reprieve to owner-occupiers and those who are looking to refinance their loans. Under the revised rules, a borrower will be exempted from the 60% TDSR threshold in refinancing a residential property, so long as it was purchased before the introduction of TDSR rules and it is owner-occupied.
However, this exemption is not expected to boost home sales for now, as the TDSR threshold still holds for those who bought homes and who are intending to purchase a property after the effective date of TDSR. Additionally, this does not indicate a policy change and the Government is not expected to loosen the reins completely on the property market in the short term.