It could take several years for the market to absorb the pipeline supply of private homes.
The government’s latest property cooling measures made it harder for developers to offload the nearly 46,000 private residential units expected to come onstream in 2019 and 2020, said Augustine Tan, president of the Real Estate Developers’ Association of Singapore (Redas).
Barring unforeseen circumstances, it could take about five years for the market to absorb the pipeline supply of private homes.
“The new cooling measures have indeed weakened market sentiment and demand as they raised the barrier for entry for all categories of buyers – from first-timers to investors and foreign buyers,” he said at the association’s annual mid-autumn festival lunch.
Tan noted that developers will have to differentiate their projects now – designing them with the buyer’s needs in mind, reported the Business Times.
“We’ve got to work harder, in short. Certainly, pricing will be a factor as well and we’ll have to price more sensitively.”
Developers would also have to be more prudent with their purchases as well as their capital allocations, he added.
Meanwhile, Second Minister for National Development Desmond Lee, who was also at the event, reiterated the government’s rationale for the new property curbs – to “keep prices in line with economic fundamentals”.
“As acknowledged by Redas, a large supply of private residential units is coming onstream and interest rates are going up. To avoid a severe correction later, which can have a more destabilising set of consequences, we decided to act earlier to maintain a stable and sustainable property market,” Lee said.
Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories, email firstname.lastname@example.org