Tag Archives: new projects

Pressure mounts as developers compete with home sellers

Singapore’s sluggish property market has resulted in developers competing with home sellers, with resale transactions accounting for 45.5 percent of total private home sales, media reports said.

In fact, resale transactions increased further to 47.1 percent in Q1 2015 under the new data collection method, as home builders put off launching new projects amid slowing demand.

Moreover, as the stock of completed private homes is expected to rise seven percent this year alone, developers are being forced to cut prices to move units.

Data from the Urban Redevelopment Authority (URA) shows that Hock Lian Seng still has 189 unsold units at its jointly developed 420-unit The Skywoods condominium, with discounts offered for some units.

“Three or four years ago, everything could just sell by itself, but right now it’s very different,” said property agent Jayson Yap.

“We need to create something more appealing,” added Yap, who advises some of his resale clients to rent furniture and décor in order to make their homes more appealing to buyers.

Private home prices slipped one percent in Q1 2015, or its sixth consecutive quarter of decline, with the luxury market hardest hit.

Property watchers warn that the mid- to low-end market may be the next segment to feel the pinch.

In its update, Maybank Kim Eng said smaller companies like Roxy-Pacific Holdings and Hock Lian Seng Holdings have the biggest exposure to the mass market segment, wherein a mounting inventory of unsold units will place pressure on prices.

“Mass market prices have not come down much yet. It has to come down,” said Maybank analyst Derrick Heng.

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Competition between new projects to affect rents

The rental market may be forced to cut prices further as a large upcoming supply of newly-completed condominiums pushes up the number of potential rental properties, according to media reports.

Property consultants believe that competition will heat up even more and rental rates will fall in the near future as project completions are expected to increase 62 percent from last year.

For instance, landlords of three-bedroom units at NV Residences in Pasir Ris, have cut monthly rentals from S$4,000 to less than S$3,500, said Chris Koh, Director of property consultancy Chris International. Moreover, some homeowners have found it difficult renting out their properties, months after collecting their keys.

NV Residences obtained its TOP in January.

Source – PropGuru – 31 Jul 2013