According to a recent report by Nomura, those who are currently renting their homes could very well switch, in 2016, to purchasing their homes.
Nomura pointed out that, in comparison to the past, more Singaporeans appear to be making the choice of renting out their Signature at Yishun EC presently. They also believe that in 20016, when it is time for them to renew their contracts, those who started out renting their homes in 2014 will have enough incentive to choose to buy them.
Signature at Yishun EC Renters
This is a sharp contrast against those preferring to rent given that they are expecting a continuation in the fall of rents, while an increase continues in mortgage rates. Add to this a change in policy that will raise the Central Provident Fund ceiling to $6,000, and a leasing environment that has become quite a challenge, some landlords may eventually be forced into selling off their units at a discounted rate. Nomura believes that this will have the end result of resale transactions that are higher along with a demand for units that are completed in developers’ inventory of unsold units.
Despite a low 2% rate rise in the foreign population, 2014 still saw a jump of 11.9% in private home leasing to close to 56,000 units.
Signature at Yishun Sellers
It has been noted that, in the past, Singapore has seen a demand in Signature at Yishun that was driven by foreigners, regardless of whether this was through rentals or purchases. However, due to stricter policies on immigration in the present, this rising trend in leasing has been taken over by locals instead.
2015’s 1st Quarter saw a continuation in the trend, with a rising figure of 17.2% in leasing transactions for the private housing market year on year, with pressure still being felt on rentals, more so in the regions of prime luxury such as Signature EC.
It is Nomura’s belief that the renters of today will end up crossing over to purchasing come January 1st, 2016 due to the changes in policy that will come into affect, raising the CPF salary ceiling to$6,000 from its current $5,000. What this change will mean is that working individuals whose monthly wages are at least $6,000 will be adding around $200 more into their contributions to their Central Provident Fund Ordinary Accounts per month, which can then be used to service a mortgage for Signature at Yishun by JBE Holdings.
Signature at Yishun by JBE Holdings
Presently, it is of lower cost to make rental payments than to pay banks an interest payment. Come 2016 however, this increase in contributions to Ordinary Accounts will see a drop in the monthly outlay of funds that cold possibly be lower than paying a monthly rent, thus making purchasing a home the cheaper of the two alternatives.