As reported by the media, with the slide in property prices still on the rise, countless home sellers have chosen to rent their homes, hoping that as the housing property industry progresses, it would eventually be easier obtain a higher sale price.
As cooling processes are tough and loans are considered on demands ever since the third quarter of 2013, private residential property prices have declined. As also observed, business deals have even declined further in the private home resale industry. The Urban Redevelopment Authority (URA) report shows that in 2014 a total of 4,860 units were sold, as compared to 6,671 units in 2013, in the resale market.
As property experts have mentioned, the most likely sellers have opted to rent out and hold back their property rather than selling their units, which signifies the decline in resale levels.
OrangeTee managing director, Steven Tan also pointed out how lots of owners that wanted their homes sold were unable to do so, due to the unfavourable prices at present. Initially, these owners have decided on renting their properties instead, in order to buy time for improvement in the property market. Eventually, they can look to sell their properties when the market recovers.
The URA records also show an increase in the number of rental transactions, i.e. from 50,417 in 2013 to 56,417 in 2014. With prices still falling, market analysts believe more would-be home sellers would look to the rental home market for relief. Nevertheless, a few homeowners could be compelled to put up properties for sale, considering the increasing interest rates.
ERA Realty executive officer, Eugene Lim said that negligible owners that have availed numerous loans are perhaps over stressed because of the rising interest rates. These are people who have been unable to fill their homes and also find it difficult to rent out their units. Then again, stress due to the rise in interest rates, increases their instalments as well and such owners might be the ones to sell their homes at this moment.