MAS cautions property buyers as number of new launches racks up

Victor Kang29 Nov 2019

Private property


Prospective home buyers should take extra precaution before taking a home loan to finance their property purchase, given the economy’s uncertainty and softening labour market, the Monetary Authority of Singapore (MAS) advised in its annual Financial Stability Review that was released 28 November.

In the review, the MAS made reference to the huge supply of unsold units from launched projects, which could spell “potential downside risks to the property market”. According to the regulator citing URA data, there are 4,377 launched but unsold units (excluding executive condominiums) in Q3 2019, which is double the 2,172 units in the same quarter last year.

“This increase will likely be exacerbated in the medium term as developers continue to launch projects on sites arising from the large volume of en bloc sales from 2017 to last year. The increase in the unsold inventory could place downward pressure on prices… if unaccompanied by a corresponding rise in demand,” said the MAS report.

Tan Tee Khoon, Country Manager of PropertyGuru, believes that while housing loan rates have increased, the MAS report is just another cautionary note for property buyers and investors. “Since the implementation of additional cooling measures last July, we have observed that property prices have moved in tandem with economic fundamentals and motivated sellers would have recalibrated expectations and priced their properties to appeal to prospects looking out for value buys,” he said.

Rental market to remain robust—for now

The MAS also noted a “stability in rental prices” that suggests that occupancy demand is adequate at this juncture to absorb newly completed units. Their caveat: The tepid economic outlook coupled with an expected increase in the supply of completed units in the medium term, could lead to new downward pressure on rentals.

As such, the MAS cautions agains overleveraging: “Investors that borrowed at higher mortgage repayments relative to incomes could face difficulties meeting the repayments on their investment properties,” the regulator warned.


Buyer preferences skewed: MAS and PropertyGuru

MAS also explained that while there were relatively healthy sales recorded in some project launches over the past two quarters, this was mostly because of specific features of those projects, such as location attributes, an observation echoing the Q3 2019 PropertyGuru Property Market Index.

In the PropertyGuru report, Tee Khoon pointed out that two-thirds (66%) of the 3,214 new sales for uncompleted private properties in Q3 2019 came from just 10 projects. Seven of out these 10 projects were mega-scale (more than 1,000 units), whereas none fell below 700 units.


Condo Sales Q3 2019 chart


Another observation could be drawn from buyer behaviour in Q3 2019. “The private property market, while showing encouraging signs on the surface, do not seem to be moving in one direction,” observed Winston Lee, Regional Head of Special Projects at PropertyGuru.

“Not only are the bigger new launch projects getting a disproportionate share of the pie, resale private properties seem to be increasingly side-lined by buyers,” he said.

MAS noted that the volume of private home resales also remained moderate in comparison to levels before the entry of the cooling measures. Specifically, overall transaction volumes for the past four quarters dropped 32% compared to the 12 months preceding the cooling measures introduced in July 2018, as resale activity remained muted.

RECOMMENDED ARTICLE: Is The ‘Wait-And-See’ Property Market Finally Over?


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Victor Kang, Digital Content Specialist at PropertyGuru, edited this story. To contact him about this or other stories, email


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