Following the recent Additional Buyer’s Stamp Duty (ABSD) hike and tighter loan limits, buyers may have to re-evaluate their dream-home purchase or re-do their sums.
A bigger gap between wants, needs, and reality for property buyers
Take for example a $1.5 million condominium unit. Buying such a unit now will cost buyers $75,000 more in ABSD. And for buyers who are looking at securing higher bank loans, owning their dream home even further away as they are able to only loan $75, 000 less.
Some buyers may have to re-do their sum and allocate a longer saving-period or they will simply have to adjust their expectations and settle for a cheaper place.
These new property curbs will affect not only developers in the land bank segment, but buyers will also take a direct hit as the impact slowly sinks in. The measures came rather abruptly and first-timers who were caught unawares might find it harder on their pockets and long-term plans.
The 9th round of property cooling measures looks set to decelerate home sales
In terms of market performance, analysts are expecting new private home sales this year to be 15% to 20% lower than the last. 1o,566 units were sold last year. This year’s figures could come in between 8,500 to 9,000.
There will also be some pressure placed on sellers who may find themselves having to lower selling prices in order to close deals. Land prices look set to rise as even more stamp duty hikes are placed on developers. This may affect the collective sale market moving on and the effect may trickle down to the new homes segment.