Property cooling measures introduced last year have contributed to a slowdown in sales momentum.
New private home sales in Singapore is forecasted to decline by about 20 percent year-on-year to 7,500 to 8,500 units for the whole of 2019, while prices of such properties could drop by up to 3.0 percent, according to a recent report from DBS Group Research.
For 2018, the transaction volume is expected to hit 10,000 to 11,000 units, with the 11-month tally already reaching around 9,300 units.
More: Private Home Prices Rose 7.9% In 2018
The research house noted that since the new cooling measures were introduced in July 2018, primary sales momentum has moderated to 500 to 800 units per month, which it believes to be the “new normal” going into 2019.
Worsening the situation are the new rules on the average unit size for non-landed housing projects outside Singapore’s central region and the nearly 40,000 units in the pipeline slated for launch despite a slowing market.
Moreover, DBS thinks that displaced en bloc buyers are unlikely to significantly increase private home sales for the whole of 2019.
“Market expectations of a boost in sales volumes from displaced en bloc households up to middle of 2018 might not materialise. Assuming that these homeowners are paid nine months after the close of en bloc tenders, we estimate that only c.11 percent of the total 8,500 en bloc households will receive their monies in H1 2019.
“Therefore, we believe that most of the buying from these displaced households will already be done before that (period) and will not be a significant boost to sales volumes in 2019.”
Furthermore, although the demand for replacement units from successful en bloc sellers is expected to be robust in the near term, such demand is not sustainable for the long term, added DBS.
Get more details on the property market outlook for 2019 here
Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories, email email@example.com