Private housing market unlikely to head into oversupply situation: Analysts

About 3,000 visitors flocked to the opening day preview for private project, The Tre Ver in Potong Pasir on Saturday (Jul 21, 2018), just two weeks after higher stamp duties and tighter loan limits were introduced.  The 729-units condominium, which will be completed in 2022, are priced from around S$1,400 psf. Despite having tighter loan-to-value limits, homebuyers Channel NewsAsia spoke to were not deterred. Interested homebuyer Eric Kon though that the pricing was “reasonable” and “worth it to buy”. When interviewing another homebuyer, she said that with the cooling measures, she would still go ahead to buy a property, after selling off her current home.

Such sentiments go against the gloomy outlook from the Real Estate Developers’ Association of Singapore (REDAS). The president, Augustine Tan has warned that the cooling measures could worsen the oversupply of private residential units.  According to data from the Urban Redevelopment Authority and JLL Singapore, an estimated 50,526 unsold private units are projected to come on stream in the coming years.

According to data compiled by JLL, an average of 12,159 units were sold annually by developers over the past decade. Based on the estimated unsold supply, about 12,632 units could be released for sale annually between 2018 and 2022 if launches from the current unsold supply are paced out. Additionally, private home sales are estimated at about 8,000 to 9,000 this year. Ms Tay mentioned that with this, it means that future supply would be able to adequately meet current and future demand. The sales volume that developers saw in 2017 was suppressed by low launch supply. This is why thousands of buyers flocked to the showflats on the night of Jul 5, 2018. This showed the extent of liquidity and pent-up demand that there is in the market.

Crowd at The Tre Ver showflat (Photo by UOL)

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