Wary buyers shun completed homes
Threat of an oversupply of private homes and a poor rental market are deterring home-seekers from buying completed homes. This is especially for homes in the city centre.
the upscale Districts 9, 10 and 11 account for the bulk of unsold units at completed developments across Singapore.
Private home vacancy rates have reached their highest point since 2006, according to URA figures.
Developers appear to be responding by cutting prices further to boost sales in order to avoid penalties for failing to sell all their units by a dateline. Fines are imposed if a builder fails to sell all their apartments in a project within 2 years of completion, under the Qualifying Certificate (QC) rules.
There were 1,412 completed but unsold homes at the end of June – 1,259 condominium units and private apartments, and 153 landed houses – according to URA last Friday.
The city centre accounted for the bulk of that – about 894 units, or 63.3% – while the city fringe had about 414 unsold units, or 29.3% of the total. said OrangeTee research head Christine Li.
Both areas far outstripped the suburbs, where there were only 104 unsold completed units, or 7.4% of the total.
Ms Li pointed out that the prices of completed homes in the city centre slid 1.9% in April through June from the previous three months, the largest quarterly drop since 2Q’2009.
“This could suggest that some developers have started to become skittish and have started to cut prices in order to move units to avoid QC fines.”
Still, buyers will likely stay on the sidelines partly due to rising vacancy rates and a possible supply overhang in the near future.
The islandwide vacancy rate for all private homes, including landed housing, climbed from 6.6% in the first quarter of this year to 7.1% in the second – the highest level since the 7.4% recorded in 1Q’2006.
City centre homes were the worse hit in the second quarter of this year, with a vacancy rate of 8.5%.
Consultants said that a bumper crop of completed homes could weaken the leasing market even further.
JLL Singapore research director Ong Teck Hui pointed out that there were 9,016 private homes completed in the first 6 months of this year, compared to 13,150 units throughout the whole of last year and 10,329 units over 2012.
Steady increase in number of unsold units in launched but uncompleted projects
Many private developments have been launched but remain unloved by buyers as home loan curbs continue to suppress demand.
The number of launched but unsold homes as at the end of June was higher than at the same time the previous year, according to official data last week.
There has been a “stead increase in unsold units in launched private residential projects” since the middle of last year, when tough restrictions were imposed under the TDSR framework, JLL Singapore research director Ong Teck Hui said.
Mr Ong noted that there were around 5,200 unsold units in launched private residential projects, as at the end of June last year. However, that jumped about 20% to reach 6,300 units, as at the end of last month, he said.
The three projects with the highest number of launched but unsold units were all in suburbs – The Santorini (Tampines), Hillview Peak (Bukit Batok) and The Skywoods (UPPPPPER Bukit Timah).
Info source: ST
So completed homes cannot sell. Uncompleted homes also finding it a tough sell. But developers are mostly still unwilling to drop prices because of possible “knock on” effects and the high land costs that they had paid over the past 2 years. Looks like we have ourselves a good ‘o fashion “Mexican stand-off ” – now to see who (buyer or seller) blinks first…
SG PropTalk 