With only four private residential projects launched in Q1 2015, the sales volume of new homes fell 27.3 percent to around 1,000 units during the period, revealed a CBRE report.
In the first three months of the year, cautious sentiment prevailed in the residential market as the Sibor climbed to 1.01 percent at end-March – a level not seen since December 2008. This impending rise in mortgage rates further dampened property buying sentiment, the report stated.
Looking ahead into the current quarter, CBRE expects the highly-anticipated launch of North Park Residences and Botanique at Bartley to boost anaemic sales.
The new home sales volume has dropped significantly since the introduction of the Total Debt Servicing Ratio (TDSR) framework in June 2013.
“As unsold units began to build up, the government also pulled back the sale of development sites for private homes so that developers now have fewer new projects in their stables compared to a year ago,” explained CBRE.
By the end of last year, there were 16,587 unsold units with another 10,155 planned units. CBRE said this inventory of almost 27,000 private homes is enough to meet the housing needs for at least three years, provided annual demand remains at the 2014 level of 7,300 units.
Meanwhile, more executive condominiums (ECs) are expected to be launched this year compared to private mass market projects.
Back in January, the Amore EC was launched while another six projects comprising 4,000 units will likely be released to buyers throughout the year.
Of the 2,000 units currently available, CBRE estimates that 300 to 350 ECs were sold in the first quarter.
“While the price of ECs are around 15 percent lower than 99-year private mass-market condominiums, potential EC buyers are handicapped by the cap of 30 percent on their household income to service loans. EC sales might not be robust, as a result,” the report added.