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Jones Lang LaSalle’s perspective: Private residential units sold by developers in July 2013

TDSR – greater impact felt on market compared to previous cooling measures

​SINGAPORE, 15 August 2013:  July’s URA figures show that the Total Debt Servicing Ratio(TDSR) framework which MAS introduced on 28 June 2013 has impacted the residential market more significantly than previous cooling measures. The 481 units sold by developers in July 2013 reflect a sharp 73 percent decline from the 1806 units sold in June. This drop exceeds the decline in monthly sales following imposition of previous cooling measures in the last few years. Furthermore, of the 343 units in the five new projects launched for sale in July, only 78 were sold, reflecting a low take-up of only 23 percent. These figures are indicative of much slower demand compared with an average take-up of 60 percent in the last few months. The five new projects launched during the month were Devonshire 8, Riverside Melodies, The Quinn, The Serenno and Vue 8 Residence.

The TDSR has slowed the purchasing process as loan quantum assessments by banks take a longer time so buyers are unable to commit to purchases as quickly as before. Demand would have also softened due to the TDSR’s impact especially on buyers who are already highly leveraged, those who rely on proxy borrower or guarantor arrangements as well as those with variable incomes.

Project launches have also slowed as a result of the TDSR with only 557 units launched for sale last month, a 69 percent drop from the 1768 launched in June. As seen with previous measures, this slowdown in launches is likely to prove only temporary and sales launches are expected to resume to more moderate levels, especially after the Ghost month. Faced with potentially slower demand, new projects could be more realistically priced although sites with strong attributes will still command a price advantage. 

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About Jones Lang LaSalle
Jones Lang LaSalle (NYSE:JLL) is a professional services and investment management firm offering specialized real estate services to clients seeking increased value by owning, occupying and investing in real estate. With annual revenue of $3.9 billion, Jones Lang LaSalle operates in 70 countries from more than 1,000 locations worldwide. On behalf of its clients, the firm provides management and real estate outsourcing services to a property portfolio of 2.6 billion square feet and completed $63 billion in sales, acquisitions and finance transactions in 2012. . Its investment management business, LaSalle Investment Management, has $46.3 billion of real estate assets under management.

Jones Lang LaSalle has over 50 years of experience in Asia Pacific, with over 26, 100 employees operating in 79 offices in 14 countries across the region. The firm was named ‘Best Property Consultancy’ in nine Asia Pacific countries at the International Property Awards Asia Pacific 2012, in association with HSBC, and was named the number one real estate advisory firm in Asia Pacific in the Euromoney Real Estate Awards 2012. 

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