New residential hotspot price range : sub-$1.5m

As an effect to the numerous residential cooling measures, demand for lower priced apartments and condominium is expected to be the gain in particular properties that are under S$1.5 million.

In the latest measure, it affects the affordability factor based on the age of buyers.

For first time home buyers who are 35 years old and below earning a monthly household income of  $12,000 and basing on debt servicing ratio of 35%, then they could look for homes worth about  maximum $1.5 mil to $1.6 mil for a 30-year loan period.

If the same buyers want to reduce the loan term to 25 years, then basing on the same debt servicing ratio, the maximum purchase price would be $1.3 million to $1.4 million.

The maximum loan period that buyers can go for without paying higher cash and/or CPF deposit is determined by 65 minus age of buyers.

However, if the debt servicing ratio were to increase to 40%, then the maximum purchase price is corresponding increase.

There are ample homes that are within this sub-$1.5 million for home buyers to select from.

Analysts are expecting prices to increase still though at 0.1% to 0.3% for Q4 2012.

17 Nov 2012