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.