Friday, May 04, 2012

Possible shortage in private property market, say consultants

After the Urban Redevelopment Authority (URA) released data on supply and demand in the private property market, several consultants are now changing their views from an oversupply to a potential shortage, especially in the Outside Central Region (OCR).

While official figures show that developers launched and sold a record number of private homes in Q1 2012, the URA noted that sales were boosted by small units that developers have been pushing to keep lump-sum prices affordable.

According to a report by The Business Times, the number of private residential units launched in Q1 jumped 68.2 percent to 6,903 units. Total sales rose 81.1 percent to 6,526 units, of which four-fifths or around 5,275 units came from the OCR, where mass-market homes are located.

Ong Teck Hui, Executive Director of Credo Real Estate, said that the number of private homes sold in the OCR for Q1 was 50 percent of the 10,374 that developers’ sold in the same region last year.

Meanwhile, the number of private homes that have yet to be sold in uncompleted developments with planning approvals plunged to 36,552 in Q1 from 39,184 in Q4, pushed down by a 15.8 percent decline in the OCR to 16,928 units.

“What we need to watch out for is whether the build-up in potential supply is too slow relative to market conditions especially in OCR,” he said.

Alan Cheong, Research Head at Savills Singapore, said that the sales of 6,526 units translate to 26,104 on an annualised basis.

“At this rate, initial fears of having 47,819 yet-to-be-sold units (including those in projects without planning approvals) in the pipeline causing an oversupply become passe, reversing market watchers' perception of a gross oversupply to gross undersupply situation.”

View the original article here

Source From Property Guru

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