Private home prices may climb by up to 2% in 2019
The Influx of 20,000 units to be launched in early 2019 may restrain price growth.
Developers are more sensitive in their pricing going into 2019, due to the potential wave of new project launches of an approximate 20,000 private residential units expected in H1, according to a report by OCBC Investment Research (OIR).
The wave of new property launches in early 2019 may stop price growth for 2019, private residential price growth may come in near the low-end of their forecast of 8%-10% for 2018, as in the report.
According to data from Urban Redevelopment Authority (URA), not counting those executive condominiums (ECs), there are 50,330 residential units in the supply pipeline as of 30 September which is 11.8% higher QoQ. Including ECs, the pipeline would consist of 53,164 units with planning approvals, on top of a potential pipeline supply of around 14,200 units from GLS sites and awarded en-bloc sale sites pending planning approval.
That means that buyers will have a wide choice with better entry level to choose from
Data from URA and Edmund Tie & Company Research found that Sim Lian Group's Treasure at Tampines development produces the most units at 2,225 followed closely by Kingsford Development's whose name is still unknown and Logan Property's The Florence Residences with 1,882 and 1,410 units available, respectively.
Rising leftover units are a major concern for developers unsold inventories with planning approvals increase to 31,900 units in Q3 from 27,000 in Q2 2018.
Of this, 24% are from the Core Central Region (CCR), 45.4% are in the rest of the central region (RCR) whilst 30.6% are located in the outside central region (OCR), as reported by OIR.
It is unlikely that the government’s cooling measures will discontinue for the time being and that is going to stifle the market in 2019 and the cost of owning a home in Singapore has increased, with the exception of Singapore citizens and first time home buyers.
Some Singapore developers already felt the impact by having lackluster performances in their share prices prior to the Additional Buyer’s Stamp Duty (ABSD) rates and Loan-to-Value (LTV) limits imposed by the Singapore government.