Supply glut may not occur, there will be strong growth for condo prices: JLL

An excess is unlikely to happen in Singapore’s private suburban market due to the pessimistic look of the Real Estate Developer Association of Singapore (REDAS). This may lead to new property curbs that would erode market confidence and worsen the high supply condition, reported Channel NewsAsia.

According to the recent survey from JLL Singapore and the Urban Redevelopment Authority (URA), 50, 526 units of available private homes are predicted to enter the market in the coming years. These may include the developments that are not obtained via planning approvals, government land and en bloc sites purchased until June 2018.

The JLL Singapore research head, Tay Huey Ying believe that the market can acquire these units provided the home builders launch their groups in intervals before the five-year deadline to sell homes in a project. URA rezoning of land usage in other part of Singapore are also been announced recently.

She believed that the developers would have the affinity to spread out launches over a period to get demand over different periods of time, it will also release units in smaller quantities to test the market regarding pricing. Furthermore, adding the developers usually have deep pockets, and it can deal with some delay in launches as seen in the past.

JJL noted that an average, 12,519 units had been purchased by home builders in the past few years, with sales this year expected to achieve 8,000 to 9,000 units. In regards to the projected unsold stock, about 12,632 homes can be launched for sale between years 2018 to 2022 if the previously unsold inventory is paced out.

However, the private condo prices in Singapore can lead to healthy growth regardless of the new cooling measures barring headwinds such as the US-China trade war. Also, further interest rate hikes by the US Federal Reserve and added cooling measures if prices continue to increase above 3.0 percent every quarter.