Mass-market home costs surprisingly resilient as property prices fall across the board

Sales at new launches are surprisingly robust.

Mass-market homes are the unlikely survivor as property sales and prices continue to fall across the island. The resilience of mass-market launches has taken analysts by surprise, as affordability remains the biggest consideration of prospective homebuyers.

According to CLSA, mass-market prices have only fallen by 2% since the peak of 2Q13 despite the TDSR rollout, while mid- and high-end home prices have fallen by 3.2% and 4.5% over the same period.

“The strength of mass-market demand at new launches has surprised us, as local buyers continued to account for up to 80% of some of the new launches, suggesting strong affordability. On the flipside, the weakness in the high-end segment shocked us the most, despite being a laggard among subsegments. The impact of the ABSD, which effectively curbed foreign demand and halted price growth, has had an impact far greater than our initial expectations on the high-end segment,” said CLSA.