With more residential projects set for completion in the coming quarters, property developers will need more time to clear their inventory of unsold units in previously launched developments, reported Singapore Business Review citing a Savills report.
“Adopting the CCR’s average monthly sales for the period of January to May 2015, and assuming there will be no further Government Land Sales (GLS), it will take about 12 years to clear the inventory of unsold units in projects under development now,” said Savills.
It highlighted that the situation is even more serious for projects located away from the central region, since the GLS programme is generally focused on the OCR and RCR.
“The time to clear the stock of present and future unsold units will be more than 12 years. Therefore, even if island-wide take-up rates double, it will take well over five years to sell down the inventory,” the report stated.
While demand is expected to gather pace in the near future, this does not mean that the property market has returned to normal.
“The broad brush measures have merely made the smaller units more affordable to local buyers whereas larger units and those with a high price quantum, mainly those projects in the CCR, are not selling fast enough to clear off the unsold inventory.
“Lowering prices further would not be a panacea to increase demand because much of the unsold stock are larger units, which, because of the larger price quantum and the various cooling measures, are beyond the reach of many locals and permanent residents,” added Savills.