Singapore's new private home sales predicted to rebound in September

After plunging 73% in July.

According to PropNex, the latest TDSR 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.

Mr Mohamed Ismail, CEO of PropNex Realty said "we are expecting a rebound in the market from September onwards as homebuyers get used to the new property loan rules."

In July, sales of new private homes crashed a whopping 73% from the 1,806 units sold in June.

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Analyzing the statistics, it was clearly the upgraders and mass condominium buyers who had curtailed their home investment as Outside Core Region (OCR) homes saw the biggest drop of up to 80% in numbers from 1,466 units to 296 units in July 2013.

We expect a more subdued private residential market ahead, with developers likely to be more nimble with pricing to avoid hitting buyers' resistance levels. 

We also foresee that many potential buyers will likely to be more cautious before making a purchase decision as they will have to take into account all the rules before buying a property,” explained Mr Mohamed Ismail.

The residential market still has genuine demand from local buyers and in particular, firsttime home buyers with no major existing loans (and should low interest rates continue to prevail in the near term), transactions will continue to be healthy.

This could be an opportune time for first time homebuyers or upgraders to enter the market if their finances are stable.

The full year forecast for new private residential home sales will range between 17,000 and 18,000 units sold as we are likely to see August to have a projected sales figure of 700 to 800 (excluding ECs) new homes sold.