Private residence purchases rose in 2012 primarily due to increased demand from public-housing dwellers, according to data from the Urban Redevelopment Authority.
17,590 of the 36,887 private residence transactions across all markets last year, or 48 per cent, involved buyers with HDB addresses. This marked a sharp increase of 17 per cent from the number of such transactions in 2011.
The increase in transactions largely took place on the primary market. The primary market was the only market to see both quarter-on-quarter and year-on-year sales growth, of 12 and 20.7 per cent respectively.
The number of transactions rose despite cooling measures last October that capped mortgage loan terms.
The popularity of private homes was driven largely by low interest rates and housing aspiration led.
Looking forward to the private housing market in 2013, the studies predicted that transaction volume would likely fall in the short term, due to cooling measures introduced in January this year.
A higher additional buyer's stamp duty (ABSD) and tighter financing restrictions might cause buyers to adopt a wait-and-see attitude before committing to any purchases.
If anything, measures such as the increased ABSD would have the greatest impact on the prime segment of the market.
The more suburban and mass-market properties should remain affordable.
However, rental yields for private properties, especially condominiums, are less secure.
Source: Business Times –28 February 2013
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