The outlook for Singapore’s housing market appears bright, according to an article written by Cushman & Wakefield Singapore’s Research Head Christine Li that was posted on TODAYonline.
One main factor fuelling this positive sentiment is the hot en bloc sector, where a total of 18 housing projects collectively worth $6.34 billion have been sold so far this year to reach a 10-year high in terms of value.
“This en bloc wave will result in an additional 9,300 new homes injected into the market, going by estimates from the Urban Redevelopment Authority (URA),” she said.
The vibrant situation is also spurring more homeowners to pull their units from the resale market in an attempt to join in the en bloc frenzy.
“Even those with little chance of success are also trying their luck. As a result, there is now a shortage of resale properties on the market — a turnaround from the situation at this time last year, when there were too many (units). This lack of supply will stoke demand and prop up the market.”
The housing market’s promising prospects is also driven by the dwindling supply of units being sold by property developers.
“Our analysis shows that the market has remained in the oversold domain for three consecutive months, with the ratio of units sold over units launched exceeding 100 percent.”
“In fact, this ratio reached an all-time high of 225 percent in the third quarter this year, indicating that developers are selling units faster than they can replenish.”
Hence, home builders will need to acquire land for their future residential projects, otherwise, they would have nothing to sell. Li estimates that there are about 10 developers in need of land despite the strong en bloc sales market.
“As such, we expect the en bloc market to be sustained over the next 12 to 18 months or so, with potentially another 10 to15 sites being transacted during this period.”
Furthermore, transactions in the primary housing market could be propelled by a sharp rise in the number of HDB upgraders who have just met the Minimum Occupation Period (MOP) of five years.
“Based on our estimate, there are around 19,000 of them this year and a further 13,000 next year, a marked improvement from the previous years,” Li added.
This article was edited by Keshia Faculin.
