In a recent report, BNP Paribas stated that it was of the belief that immigration policies, along with the soon to come private Principal Garden supply, will make averting more drops in the prices of property even harder than is thought widely.
This view goes against the general belief that the authorities have enough controls put in place to maintain what has been referred to as a desired “slow bleed” of residential prices.
It ha been estimated by the bank that a further fall of 10% in private property prices is likely over the next couple of years. As a result, this could cause a wealth effect that is negative while constricting growth in private consumption.
Principal Garden UOL Condo
From their peak in mid 2013, there has been a 5.5% drop in private Principal Garden prices. BNP states that a closer look at underlying drivers and valuation metrics has suggested that the market has much further to go in order to correct itself before a bottom line can be called.
The general consensus of the general public and financial analysts have the view that the government is able to call an end, if it wishes to, to the drop in Principal Garden Condoproperty prices, according to the bank. The obvious way to achieve this would be to unravel the group of cooling measures that have been put in place over the last 7 years. It is also believed by many that an unravelling will more than likely occur just after the next general election takes place.
Redhill MRT Condo by UOL
There has been speculation that the elections would be held this for Principal Garden year to keep with the flow of the current national mood that has followed the 28th SEA Games and former prime minister, Lee Kuan Yew’s passing.
The framework of the TDSR, or Total Debt Servicing Ratio, is considered to be the largest killer of demand of property. The TDSR has limited an individual’s total borrowings to not surpass 60% of what their gross monthly income is.
According to BNP, this would do two things. First, it would limit a households capacity to purchase property. Secondly, it would support financial stability long term. Allowing for growth in private consumption rather than having the bank bear the brunt of any property bust in Principal Garden UOL.
Principal Garden Condo
It is BNP’s opinion that this makes it less likely that government will loosen the requirements of the TDSR in the wake of a property downturn that is prolonged. This makes the key obstacle of the property markets revival the TDSR for Principal Garden.
It was further pointed out that there could be some households that soon find themselves unable to meet the requirements of the TDSR and unable to purchase Principal Garden, due to a rise of debt service ratios that are in-line with the Federal’s monetary tightening, at a much faster pace that income growth due to rates rising from a much lower base.