Desmond Sim, Head, CBRE Research, Singapore and South East Asia:
The private housing market continued to demonstrate resilience, going by new home sales last month. Buyers bought a total of 860 new homes, of which 46 per cent were from new launches Queens Park and Parc Riviera.
With a dearth of new options, the units from existing projects will benefit from this underlying demand, a phenomenon that has over the past few months helped to reduce unsold inventory to 20,577 (as at Sept 2016).
Developers
have sold 7,769 homes so far this year, crossing the sales tally of 7,440 units
recorded in 2015. It is very possible that the market will see 8,000 units sold
in 2016. This is despite fewer projects and units launched for sale this year,
and the muted numbers expected in December in the absence of new launches.
Buyers
are motivated by a few factors. Firstly, competitive prices have been offering
them better value. Secondly, we have observed buyers moving to lock in home
loan packages before interest rates rise further.
EC
projects have also shown a healthy performance year to date. A total of 3,803
new ECs have been sold, which is 49% higher than the 2,550 units sold in 2015.
Demand is driven by a flight to value, with buyers deterred from the private
market given its strong entry barriers. The 25%-30% price gap between ECs and
private suburban homes have made ECs an attractive housing option for those who
qualify. ECs present a better value proposition for eligible buyers who
can afford to wait out the 5 years’ Minimum Occupation Period, which is
probably why sales have shown a steady pick-up.
Buyers
will have to weigh a few factors in the coming year – the economic outlook for
2017, their credit health against a backdrop of a series of impending Fed
rate hikes and its impact on lending rates in Singapore, pricing which will be
determined by project attributes, location, and very competitive land bids.
Despite the increased sales this year, CBRE is projecting slightly lower sales
for 2017 at around 7,000 to 7,500 units.”
Disclaimer:
About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world's largest commercial real estate services and investment firm (based on 2016 revenue). The company has more than 75,000 employees (excluding affiliates), and serves real estate investors and occupiers through approximately 450 offices (excluding affiliates) worldwide. CBRE offers a broad range of integrated services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at www.cbre.com.
