Compared to the robust market conditions seen in 2013, sales of new private homes in the last two years have been severely depressed, with transactions halving to 7,300 units in 2014 and 7,440 units last year, according to CBRE Research.
The report stated that Singapore’s housing market is likely to remain flat this year as demand continues to be hindered by the property cooling measures, economic slowdown and rising interest rates.
As sales have slowed, developers are finding themselves stuck with many unsold units, but the situation is not as bad as before. The number of uncompleted unsold units fell to 23,000 at the end of 2015 from nearly 27,000 in 2014, said CBRE.
“The reduction is due to lesser new projects being added due to fewer sites being sold in 2015, translating to a limited new supply going forward.”
Meanwhile, the private property price index has dropped by 8.4 percent since peaking in Q3 2013. Specifically, the price gap between the Core Central Region and the outer regions have narrowed, presenting a window of opportunity for investors looking for good deals in the prime market, noted the consultancy.
It believes that after suffering nine quarters of price and volume adjustments, the trough may be in sight as supply runs low and prices reach an equilibrium.
“Should the government relax the existing cooling measures, it may stoke buying interest. When that happens, the window of opportunity will narrow and prices might see some upside as early as 2018, led by the prime segment.”