Dynamic outlook for Singapore property market
Last year saw 18 residential projects launched, of which 11 were private condominiums and seven were executive condos (ECs). According to monthly developer sale statistics released by URA, developers sold on average about 660 private homes in each month of 2015, which was slightly higher than the low figure in 2014-where we saw 630 home on average per month. This is a far cry from the usual healthy monthly developer sales of about 1,000 units per month prior to 2014. Well, it’s not a completely sad picture. There are projects that received strong buyer’s interest, including High Park Residences, North Park Residences, Botanique at Bartley and Sims Urban Oasis. Good sales were underpinned by either competitive pricing or special project selling points such as mixed-use development concept or quaint residential enclaves.
More information on 7 hot launches in 2015, click here.
According to JJL’s Chua – New home sales in 2016 is expected to be ‘ lacklustre’ as the Singapore property market is likely to be affected by the challenging global economy and the interest rate hike. ‘The government’s cooling measures are not expected to be removed anytime soon, “ thus the market is likely to remain sluggish till end-2016.
Prices of new launches in the suburbs near MRT stations are forecast to remain range bound at $1250-1350psf. Development in the city fringe that are nearer to the CBD could fetch $1450-1550psf on average.
Government cuts Land supply
The government has cut the amount of land it plans to sell in the first half of 2016 as property prices remain subdued. It will comprise four sites on the confirmed list, which will be launched for sale on set dates, and 12 sites on the reserve list. Together, the sites can accommodate up to 7,420 homes.
The announced sales programme is down from second half of 2015 with land area yielding 7,825 homes. Land tender price is likely to escalate due to heated competition from limited supply.
Rental prices of private residential properties fell 4.3% in the 3rd quarter of 2015 from one year ago. Coupled with falling rents is the record amount of new completed units entering the market in 2016. Owner should be prepared to adjust their rental expectation downwards to keep their units rented ahead of others.
<to be continued>