With the improved buyer sentiment over the recent months, unsold home inventory in Singapore fell to a seven-year low at 16,031 units during the third quarter of 2017, reported Singapore Business Review citing Jefferies Singapore Limited.
Total transaction volume, on the other hand, rose 54 percent year-on-year in the first ten months of 2017. In fact, quarterly resale volumes have already reached 2012 levels, while primary home sale volumes are expected to catch up this year.
The rental market, however, remains weak, said Jefferies.
It noted that while vacancy rates dropped from its Q2 2016 peak of 8.9 percent, it remained relatively high at 8.4 percent in Q3 2017 compared with Q1 2013’s 5.2 percent and the average rate of about 6.5 percent over the past decade.
Notably, over 30,000 private homes were vacant in Q3 2017, with rents remaining unchanged from the previous quarter.
Meanwhile, private residential units in the pipeline stood at 43,054 as at Q3 2017.
Jefferies expects the redevelopment of en bloc sites and the supply from GLS sites to potentially add another 20,000 new private homes.
These would increase the number of unsold units currently in the pipeline by more than double in the next one to two years.
For the first half of 2018, Jefferies expects the housing units to stay at the same level as at the second half of 2017.
This article was edited by Keshia Faculin.