Developers face big competition amid slew of new launches

Romesh NavaratnarajahMarch 16, 2015

Singapore condominium

Property developers are expected to face greater competition in the private residential market as more projects are rolled out, revealed industry experts quoted in the media.

New URA home sales data for January shows that 20 large developments still have a total unsold stock of over 200 units each, excluding executive condominiums (ECs).

As such, property developers may have to consider dangling more discounts to move units, according to Century 21 Singapore.

Meanwhile, recently launched projects achieved fairly healthy results. For instance, Kingsford Waterbay at Upper Serangoon sold 140 units at an average price of $1,050 to $1,180 psf during the weekend of 7 and 8 March, while Sims Urban Oasis at Sims Drive moved 170 units at an average price of $1,350 psf since sales began in mid-February.

Analysts noted that the positive sales momentum may lead to the launch of more projects.

But the new launches are expected to place further pressure on existing projects with unsold units. Many developers have been reluctant to substantially reduce prices despite weaker sales since the introduction of the Total Debt Servicing Ratio framework.

“Of this whole list, perhaps only The Panorama in Ang Mo Kio has an obvious drop in prices,” said Ku Swee Yong, Chief Executive Officer of Century 21 Singapore.

“What developers have been doing in the last 12 months is that they have been slowly increasing the commission payable to agents, in order for them to swing their clients to these projects.

“Right now, it looks like things will be that way, depending on which developers decide to cut their prices more, then we would see the game changing,” noted Ku.

 

Romesh Navaratnarajah, Singapore Editor at PropertyGuru, edited this story. To contact him about this or other stories email romesh@propertyguru.com.sg

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