By Argus Software
On the back of low interest rates and strong market liquidity, transaction volumes of commercial strata-titled units in both the primary and secondary property markets have risen tremendously. Cooling measures in the residential sector have also diverted yield hungry investors towards the commercial property sectors. As a result, property developers have started to ride on the wave of investor interest and strata-sell units in commercial developments instead of leasing them out for recurring income.
Impact of the TDSR on commercial property sales
In June 2013, the Singapore government announced the implementation of a Total Debt Servicing Ratio (TDSR) framework, which requires the application of a 4.5% medium-term interest rate or the prevailing market interest rate, whichever is higher, to the commercial property loan that the borrower is applying for. According to DTZ Research, the number of strata-titled shop and factory resale transactions fell by around 67% ...
