Enbloc Fever – How market is likely to behave



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I came across a research paper by Sotheby’s International Realty , this paper lays out the likely time-line for the launch of the new projects from Q2 2018 to Q4 2019 and analyses the historical patterns of supply and demand to throw some light on how the market is likey to behave. Here are the main abstract:

Potential Supply
For the period Q2–Q4 2018, up to 29 new projects supplying some 14,200 units can be launched.
For 2019, 57 new projects supplying around 15,100 units can be expected.

Is this supply excessive?
For developers to launch around 15,000 units would not seem too ambitious for three reason:
1. the market is now on recovery tract, similar to the period of 2009-2011.
2. developers had sold most of the units in the existing projects
3. developer will also likely pace their launches
Potential Demand
In light of Q1 2018’s performance, an increase of 10-15%p.a. in demand over 2017’s level. This will translate to an expected demand of 11,500-12,000 new home sales in 2018 and 12,000-13,500 in 2019.In land scarce Singapore, owners and investors have come to reply on real estate a reliable source of capital preservation, legacy planning and appreciation. In addition, fresh demand can be expected from a portion of the sellers of the recent bout of collective sales.
What about Prices?
Given the higher land prices, we can expect new norms to be set in prices.Will the residential market be over-heated in 2018 and 2019? House view is probably not yet. The coming launches of luxury projects will likely welcome the return of foreign investors.

Read full paper, click here.