The January 2014 fire at Marina Bay Suites that ended in 2 casualties had one other unsettling effect: it uncovered the state of the market, with lower than 10 % of the condominiums occupied by homeowners, even though 90 % of them had already been sold by the developer. 3-bedroom items in the same development are quoted to cost S$ three million, while four-bedroom condos value as much as S$ 6 million. One in all 3 penthouses there was sold for a staggering S$ 19.three million. The shortage of occupation of the models at Marina Bay Suites suggests that owners of luxury condos face difficulties in renting out their condos at the prices they prefer.
After this statement, concerns grew concerning a potential chill in the remainder of the residential property market, as nicely, however they were shortly disparaged by a Savills report, showing that a record 15,083 rental transactions have been signed throughout the 3rd Quarter of 2013, the latest for which data was available in the 1st Quarter of 2014. The URA (City Redevelopment Authority) released knowledge showing leases holding up. For the third quarter in 2013, the index for private residential properties rose by 0.2 %.
Nonetheless, starting with the second quarter of 2014 the threat of the possibility of an oversupply is a cause for concern, as 17,459 units left vacant in the 3rd Quarter of 2013 and one other 26,000 models expected to be accomplished in 2014 will crowd the property market. A part of these models are expected to be occupied by Housing and Improvement Board flat upgraders.
Another concern is the large number of shoebox items scheduled to be released on the Rental Listings in Singapore market. SREX (Singapore Real Estate Trade) estimates report a number of 6,550 private residences and condominiums resold in 2013, compared to the 12,278 resold in 2012. Because of the capping of housing loan applicants’ total month-to-month debt repayments to 60 % of their total earnings, November and December 2013 registered lower than 400 resale units transacted every month.
Nonetheless, most property buyers are aware of the scenario within the 2014 residential property market, with the vast majority of them believing they’re able to face the upcoming oversupply, so long as they are able to pay off their monthly installments and mortgage curiosity rates stay low.
The staggering decrease in new residence sales to 259 models in January 2014 from 1,410 models sold in December 2012 and 1,271 sold in November 2012 could possibly be one rationalization for Singaporeans’ reluctance to buy.
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