Lush Dream Home

Unsold units will take many years to clear

Posted on 6 Sep 2015 | Comments Off

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.

Private property prices down 3.2% from year ago

Posted on 6 Sep 2015 | Comments Off

Prices of non-landed private homes in Singapore fell 3.2 percent in the second quarter of 2015 from the same period last year, according to the latest Knight Frank Global House Price Index.

The report tracked 56 countries and ranked them according to the annual percentage change in home prices. Singapore placed 49th on the list.

Since 2009, the government has introduced several rounds of property cooling measures to slow down the pace of sales and push prices down.

Like Singapore, Hong Kong also introduced measures to cool its red-hot property market, but mainstream prices have shot up 20.7 percent year-on-year, the highest globally.

“Increasing liquidity and the continual flow of wealthy mainland Chinese investors into Hong Kong’s residential sector meant the number of new homes sold in the first half of 2015 exceeded 8,700,” said Knight Frank.

Globally, the Index rose marginally by 0.1 percent in the year to June 2015, its weakest rate of growth since Q4 2011.

“Of the 56 housing markets tracked, 27 percent recorded an annual decline in prices, but back in 2011, 44 percent of housing markets fell into this bracket,” added the report.