Here's the impact of MAS' debt servicing framework on August flash estimates

Purchasing power of buyers has been affected.

According to Mr Mohamed Ismail, CEO of PropNex Realty, the latest new debt servicing framework introduced by MAS with loan interest rates pegged at 3.5% may prompt potential homebuyers to take a more discretionary view of home buying with the reduced affordability levels. 

He believes the Total Debt Servicing Ratio (TDSR) has reduced the purchasing power of some buyers and also slowed the purchasing process as loan assessments by banks take a longer time so buyers are unable to commit to purchases as quickly as before.

Here's more from Mr Mohamed Ismail, CEO of PropNex Realty:

Demand would have also softened due to the TDSR’s impact especially on buyers who already have other existing mortgages.

However, projects with good location attribute and attractive price offers would be enticing draws for prospective buyers. Developers are also likely to be nimble with their pricing strategy as witnessed at the recent launches at Skyvue and Thomson Tree in order to avoid hitting buyer’s price resistance level, especially after the TDSR.

Moving forward, we expect the mass market segment to remain resilient as they are well-supported by genuine upgraders. We are cautiously optimistic that private property prices could rise by 2.5% for the whole year, with OCR properties to rise by up between 8 - 9 %.

With more launchesexpected in the last quarter this year, we expect a healthy demand as long as developers priced them right.