The continue rise of private properties prices comes from different factors. These are just some of them..
1- Landlords choosing to continue to collect rental due to the good rental rate opportunities, instead of selling it.
Eg. Average rental of 1 bedroom in Watertown Punggol has increased to 3500-3800 from 1 year ago 2500. Landlord who initially thought of cashing out the profits, decides to continue collect rental.
2- Private properties owners who are choosing to sell private and buy hdb are held back by the 15 month wait out, resulting in lesser supply in the resale market.
Eg. A family of 5 who wants to cash out profits from their previous private property purchase to buy back HDB for the bigger space are jam up by the 30 Sep measures.
3- New home sales average price per squarefoot is much higher than resale average price per squarefoot, owners with stronger holding power may feel to continue asking for higher price
Eg. An owner from 8 @ woodleigh sees that the new projects, Parc Colonial & Woodleigh Residences, nearby his property are trading at above $2000psf, he thinks that his property trading at $1500psf is underpriced, he wants to at least sell close to $1700-1800psf.
4- Private owners who are still planning ahead to sell their condos while serving the waiting out period of 15 months, will factor in the rental costs.
Eg. A private property owner can’t stand his neighbours causing nuisance decides to sell instead of rent, because of this new measures kicking in, he has to price his property higher by $85,000 to cover his expected rental of $5500 X 15 months.
5- Rising interest rates & stricter loan requirements means that some private owners are either saving up more or just ask higher in terms of sale price to cover the funding of their next house.
Eg. To purchase a $2m property and service the loan, a buyer has to fork out $5177 based on 1.5% interest rate for 30 years loan. But now, he has to service a $6989 EMI based on 3.8% for the same loan amount.
His age 35, monthly income $12k. He used to be able to get max loan of $1.603m under the previous calculations. But currently, his max loan is at $1.382m. The shortfall means that he has to go for a lower priced property, save up more or increase his asking price of his current property.
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