New private home sales expected to slump by 20% in 2019: DBS

Romesh Navaratnarajah8 Jan 2019

IMF Singapore property foreign buyer

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 romesh@propertyguru.com.sg

POST COMMENT

You may also like these articles

Govt trims land sales amid large supply, softer demand

The upcoming supply is nearly 20 percent lower than the over 8,000 units provided in the second half of 2018. The government revealed last week that it will release five confirmed list sites and nine

Continue Reading7 Dec 2018

Outlook 2019: Private housing supply in Singapore to surge in 2019

A new condominium project on the former Pearlbank Apartments en bloc site in Outram is expected to launch next year.The private housing supply in Singapore is expected to surge next year as $10.5 bill

Continue Reading13 Dec 2018

Allgreen Properties to launch first major project of 2019

Artist's impression of Fourth Avenue Residences and the surrounding GCB area. (Photo: Allgreen Properties)On Saturday (5 Jan), developer Allgreen Properties is set to preview Fourth Avenue Residences,

Continue Reading4 Jan 2019